| Previous Section | Index | Home Page |
The sadness is that, at best, the Government have allowed the service to wither on the vine over the past 12 years. At worst, we could say that they have
comprehensively trashed it. First, the Government did not secure a level playing field. International operators can come to the United Kingdom to take some of the most lucrative parts of the business, perhaps making them loss leaders before making further advances. British postal services cannot provide those same services in other European countries. The Government have been negligent in not pushing the issue further and not seeking a level playing field for Royal Mail overseas.
Secondly, the Government are guilty of not having had a vision for the postal service and Royal Mail more generally. As a consequence, the management of Royal Mail have been left to manage the decline of the service. We have lost the Sunday collection. The first—indeed, the only—post arrives later and later, and the second delivery has been cancelled altogether. We have seen Saturday collections being moved to earlier times. I went past a post box the other day where the last collection on Saturday was at 9.15 am, so gone is the late morning collection, gone is the Sunday collection, and it is no longer the convenient service that it used to be.
We must be fair and say that that is not the responsibility of the managers. They have been trying to manage a difficult business through difficult times and they faced a triple squeeze. I pay tribute to Adam Crozier for much of the work that he has done and for his genuine zeal and enthusiasm to deliver a 21st century service. He has been squeezed by the financial pressures that we heard about in the excellent speech from my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), by the huge pension fund deficit, which would technically make the Royal Mail insolvent, and by increased competition both from other services such as e-mail and from other operators.
Equally, we should not blame workers. There are, of course, major problems in some of the cities, but the postal workers in my constituency are incredibly diligent, hard-working, enthusiastic people who provide an outstanding service. From my contact with them—people who have worked in Royal Mail for many years, in some cases 20 years or more—I know that they want to deliver a continuing good service in the years to come and they recognise the need to modernise. The challenge will be to carry them with us during that period of change.
It is right that the Business and Enterprise Committee will be asked to look into how the Post Office can offer services more akin to those of the financial services offered by banks. I agree with that because we suggested it. It was the Opposition motion last year that suggested that post offices should offer a wider range of services, but the Government Whips marshalled their troops to vote it down.
The sadness and the irony of the situation are that a Government with vision would have decided on the services that Royal Mail and the Post Office could offer, before deciding to slash and burn their way through the post office network. The process should have been completely reversed. We should have looked at how we could extend the services and how post offices could offer more services to the community and then determined the size of network necessary to deliver that, rather than doing it the other way round.
That is the charge that goes to the heart of the Government’s failings. There has been no vision of how to go through the process, and they have ended up confused and unable to see their way forward, as was evident from the Minister’s speech today. Royal Mail needs a massive injection of finance. It needs to modernise its processes and to invest in reskilling its work force. It needs to address the pension fund problems, about which we have heard so much. It needs to be able to compete with well-resourced international businesses.
That means that there must be a new approach, and part-privatisation must be part of that process. There must be an opportunity to engage the work force and there may, therefore, be opportunities to involve them as shareholders in a revitalised business. But the Minister must accept that what the Government propose is part-privatisation. It is not full privatisation, but bringing in other investors is, by definition, part-privatisation. He should have the courage to say to the House that that is what the Government propose. We will support him in delivering that, because it is the only way to deliver the change that this vital service needs.
6.8 pm
Mr. John Heppell (Nottingham, East) (Lab): It is a pleasure to take part in this debate, especially facing my neighbour—I almost said my hon. Friend—the right hon. and learned Member for Rushcliffe (Mr. Clarke), whose contributions I always value and whose judgment I sometimes doubt. I know he was one of the first people to predict the present economic crisis. The difficulty was that he predicted it in 1997, 1998, 2000 and so on, until the present day. He might say that he is a man ahead of his time. Another phrase comes to mind; it seems to me like premature speculation.
I do not share the view of my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) that the motion moved by the right hon. and learned Member for Rushcliffe was to do with wrong-footing the Labour party, although I do think that was part of it. It was quite clever to pick the emotive words—I do not want to get hung up on the point about whether it is privatisation or not, but the reference to “partial privatisation” was certainly going to be a red rag to many of my colleagues. That goes without saying. I think the right hon. and learned Gentleman realised that by doing that he was concentrating the debate—or certainly the Labour speeches.
In some respects, however, I think there was a simpler reason why the right hon. and learned Gentleman needed to concentrate on that one particular point. Hooper makes it quite clear:
“Our recommendations are a package. Each element of the package is needed if the universal service is to be sustained: modernisation achieved through partnership, tackling the pension deficit, and changing the regulatory regime.”
I do not think the right hon. and learned Gentleman can agree with the rest of those recommendations. He can say he welcomes them, but they are not contained in the motion. Why does the motion not say that we will back Hooper on all his recommendations? When we take a long cautious look at the legislation, rather than a rapid look, and when we decide what we are going to do, I suspect that in Committee and at other stages, there will be a fair amount of opposition from those on the Tory Benches to the regulatory regime that we propose. History suggests that that will be the case.
I suspect it is also the case that we will not get any guarantees on the pension deficit either. I may be wrong, but when we are talking about an Opposition who are committed to cuts in public services across the board in every area, including in this Department, why would Royal Mail pensions be left out? Why would the Opposition decide, “Oh yes, we’ll find the £7 billion, £8 billion or £9 billion for that while we’re cutting the other services”? That just does not ring true to me. It does not chime with what we have heard in the past. The right hon. and learned Gentleman’s predecessor as shadow Business Secretary would not even give a guarantee about the Post Office. I know that the Post Office is not part of today’s debate, but the Government have made a £1.7 billion commitment to keep the post office network. When asked about that, the previous shadow Business Secretary, the hon. Member for Rutland and Melton (Alan Duncan), would not give a guarantee—I have the quotes.
Charles Hendry: Perhaps the hon. Gentleman should go back and look again at that debate. I responded to it, and I gave a clear, categorical assurance that that would be the case.
Mr. Heppell: My hon. Friend the Member for Reading, West (Martin Salter) asked the then shadow Business Secretary:
“If I am to be tempted to vote for the motion, will he give an undertaking on behalf of his party to put £1.7 billion of investment into the network so that it can be sustained in a good old socialist fashion up to 2011?”
The then shadow Business Secretary said:
“I will not do that”.—[ Official Report, 19 March 2008; Vol. 473, c. 950.]
That is fairly specific. If I am wrong, I would be happy to give way to the right hon. and learned Member for Rushcliffe so that he can get up and give a guarantee now. As we are talking about the Hooper review, will he give a guarantee that the Opposition will back the Government’s view and do something about the pensions deficit?
Mr. Kenneth Clarke: There is absolutely no dispute from the Opposition or anywhere else that the accrued pension rights of those in the pension fund must be protected. It is a question of how that is financed. The hon. Gentleman appears to believe that the Government are committing themselves to injecting £7 billion to effect that guarantee. I do not think they are. Our position at the moment, which is why the motion is how it is, is that we are waiting for the Government to spell out how they will address the pension deficit, but the Minister for Employment Relations and Postal Affairs studiously avoided giving any detail about how he was going to do it.
Mr. Heppell:
I suspect that that will not be the case. Just this week, the Mayor of London, who used to be the hon. Member for Henley, was pronouncing about public sector pensions and how it was not our job to protect them. I understand the argument that the Tory party would make. It would ask why public sector pensions should be protected when people with private pensions, who are going broke, are not, and then there are the people who have no pensions. Taxpayers have to pay for that public sector protection. Given that people who have put their money into housing have lost 15 per
cent. and that pension funds are losing about 35 per cent., the argument that the Government should not intervene to find the money for the pensions is powerful.
However, there is a powerful argument the other way, and I am not just talking about the fact that many of the people involved got the pension rights by accepting fairly low-paid public service jobs, although that is one point. In this case, another argument can also be made. The package is not just to protect thousands of peoples’ pensions; it will modernise Royal Mail, set up a new regulatory regime and guarantee the universal service obligation.
The package will also raise private sector money. I might be at odds with my colleagues on this, but I have no problem with that, although I am not sure how much should be raised in that way or whether another mechanism could be used. Hooper was fairly specific on the issue; it is not only about the money that a private sector partner would involve. He says:
“We recommend a strategic partnership between Royal Mail and one or more private sector companies with demonstrable experience of transforming a major business, ideally a major network business.”
In talking about her experience with TNT and Deutsche Post, my right hon. Friend the Member for Leicester, West (Ms Hewitt) made it clear that those companies have experience of making a company modernise and become more efficient. Many of my comrades have sentimental views about Royal Mail and the Post Office and those views are shared by many across the country. My comrades want to protect the services, and I think that Hooper does as well—but he wants to do so by doing what is necessary to protect them. The Hooper review is called “Modernise or decline”. He is right about one thing: doing nothing, and taking the usual Tory line, is not an option. We need to be very proactive.
There is a problem with everyone wanting to cherry-pick from the report. The report holds together well, although—I will be honest—there are bits of it that I do not understand: I could not quite understand what the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) was saying about it. However, the details can be worked out in Committee.
Mr. Deputy Speaker: Order. I am afraid that the hon. Gentleman had to be pipped at the post.
6.17 pm
Mr. Dai Davies (Blaenau Gwent) (Ind): I shall be very quick, Mr. Deputy Speaker, so that more Members can speak.
I echo the sentiments of the hon. Member for Morecambe and Lunesdale (Geraldine Smith); I only wish that she had had as much time as the Front Benchers. I want to make four quick points. First, the Government said that they were in no rush, and I urge them to leave the decision until the next general election, to put it in their manifesto and to let the people decide. In my constituency, the people want the Post Office and Royal Mail to be kept in public ownership.
My second point is that we all agree on the need to modernise, but where have we been? We talk about the equipment that Royal Mail has to use. Where have we been in changing that, and what has the chief executive done to bring that about? What have we paid him for not doing it? Huge amounts of money.
Thirdly, a level playing field has been mentioned on numerous occasions. The post office in my constituency delivers for the last 2 miles, which is the most difficult part of the delivery. The TNTs of this world—the private companies—get the cream, while the people at the sharp end are left with a really difficult job. I urge any Member who has not visited a sorting office or walked some of the patches to which our postmen have to go, to give that a go. Has Hooper done it? Did he visit the sorting offices and speak to the posties? He certainly did not do so in my constituency.
Fourthly, we have seen what greed has done to the banks; the drive for profit and more money has almost destroyed the financial system of this country and across the world. I urge the Government to consider that, and not to allow the same to happen to Royal Mail.
6.19 pm
Albert Owen (Ynys Môn) (Lab): I welcome this debate on Royal Mail. I also welcome the shadow Business Secretary, who is no longer in his place, to his new role. I can understand why he has been brought into it, because he was certainly entertaining, and the Conservative party needs an entertainment officer as they have not had one on such issues for some time. I did not realise that he had been in charge of the Post Office. I remember disagreeing with him when he was in charge of health, education and the economy. However, I agree with him on many issues, including Europe, and I agreed with him when he told Mrs. Thatcher that it was time to go. It is a shame that he is not in his place, because I am trying to offer him some warm words. Nevertheless, I cannot agree with his motion because, as my hon. Friend the Member for Nottingham, East (Mr. Heppell) said, it is just mischief-making, and this is a serious debate about a serious issue.
I welcome many of the interesting recommendations made by Hooper in his report, particularly on the universal service obligation, which is very important to areas such as mine which are on the periphery and rely on the six-days-a-week service. We do not have very fast broadband and we have a poor gas network, but at least we have our USO. We need the post delivered on time in a daily fashion like the rest of the United Kingdom.
When the Business and Enterprise Committee considers the details of the future of the Post Office, I urge it to develop the issues that the Government have raised about establishing better financial services for the Post Office network. That is a good idea, and it has come not only from the Conservative party; it has consensus around it. Among the best services that the Post Office provides is the exchange service for the pound against foreign currencies, where it has been very successful.
On the Post Office card account, the Government were right to provide that security and foundation to the post office network for the future, and we need to build on that. Given the crisis in the financial sector, the trusted brand that is the Post Office is a good way of providing such services to local communities across the United Kingdom of Great Britain and Northern Ireland.
I do not have much time left to give an alternative to what has been said about this issue being just about privatisation and the public sector. There are other
models that the Business and Enterprise Committee and the Department should consider. In Wales, we all get water provided by Glas Cymru, which is the owner of Welsh Water. It is a not-for-profit organisation—a company limited by guarantee. It provides an excellent service, and Hooper dismisses it too quickly in his report. It is a successful model that could be used in delivering monopoly services such as mail, although I understand that there is the issue of European regulations. Its activities are funded and financed by bonds. It has within its organisation specialist contract partners employed by Welsh Water following a procurement process.
That business model improves service delivery by employing the best contract partner for each distinct activity within the business. Looking at the postal business globally, I can see that type of model helping to deliver services. It is an example of the kind of partnership within a monopoly that Hooper dismisses so quickly. The company also has the unique distinction of paying annual bonuses to its customers—dividends are given on an annual basis by reducing the bills—and it is able to get guaranteed loans over a period whereby it can reinvest in the company infrastructure. That is also worth considering when we talk about universal postal services. This is not about private versus public alone; we need to go beyond that.
Phil Wilson (Sedgefield) (Lab): Does my hon. Friend agree that we need to resolve the problems around Royal Mail under this Government? If the Tories had their way, they would probably privatise it in its entirety?
Albert Owen: I was not going to go down that partisan route, but I do worry about privatisation and the Conservatives. Royal Mail is the only organisation left that they did not privatise before, so it would be the first to go if they came back to office; they would start where they left off. The railways are a good example of the mess that they made. I am quite pleased, however, that we brought Network Rail back into public ownership as a not-for-profit organisation. It works side by side with private train operators, which is why I am suggesting an alternative model where a not-for-profit organisation is used to deliver a quality service and product to all customers. That should be the basis of what we do.
We tend to have dogmatic and ideological debates on such matters, but at the end of the day, we often forget that Royal Mail is there to provide a service to the public. I do not think that nationalisation or public ownership are dirty words, and the intelligent way forward in this debate is to look at alternative models. Hooper made a huge mistake in dismissing alternative models that work in this country, models which are regulated, which provide a high standard of service and which provide investment for the future. The risks involved in providing water are quite huge, but through such a model, Glas Cymru is able to invest for the long term by getting guarantees. We are giving guarantees to the banks and to everyone else.
The Treasury should look seriously at the model that I am suggesting and look at what Glas Cymru is doing. It is delivering a public service through a not-for-profit model that provides a good standard of service for the people that I represent and for all of the people of Wales. That model can be rolled out across the whole United Kingdom.
| Next Section | Index | Home Page |