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Mr. McFadden: I shall try to go through the issues that the hon. Gentleman raises. He is absolutely right that the world has changed and people have communications alternatives. That stark fact should concentrate everyone's minds as they stand on the threshold of the dispute. It is why, indeed, a strike would be so tragic for our postal service and those who work in it.

The hon. Gentleman referred to the switch from mail, and, as I said in my statement, there is already a highly developed market in parcels. High street retail chains already, sadly, carry adverts saying, "Fed up with postal strikes? We don't use the Royal Mail", and I fear that we will simply see more of that if the strike goes ahead.

Some 50 companies account for some 40 per cent. of the mail that is posted by letter every day. If a major shift is made by those companies, away from mail to paperless billing and greater incentives for direct debit payment, it could do permanent damage to Royal Mail's prospects. Again, my fear is that industrial action would only make such a shift more likely.

The hon. Gentleman asked about the delivery of pensions and benefits. Those sent through the post are now a fairly small minority; most are paid either directly into bank accounts or through the Post Office card account. As I said, for the minority who still receive benefits through the post, the Department for Work and Pensions will make arrangements to try to ensure that people do not lose out on the money to which they are entitled.

Mr. Ian McCartney (Makerfield) (Lab): As a former postal services Minister, I must say that we have been 12 years in coming to this point, and it is really important that a Sir George Bain-type figure is appointed to negotiate a settlement-negotiate, negotiate, negotiate. Why? Because front-line staff and customers in every one of our constituencies deserve better. If people give up the skill, knowledge and commitment to negotiate, they will be as much use as a chocolate fireguard at defending their members' interests or the company's long-term interests. I ask my right hon. Friend to make sure that the management and the union get around the table to resolve the issue to ensure that the company and its front-line staff have a future, and that its customers can get on with their business.

Mr. McFadden: My right hon. Friend makes his point very effectively. On third party involvement, ACAS is engaged, but I believe that it would be far better able to carry out the very effective role that it often can carry out if the threat of industrial action were lifted. ACAS stands ready to give assistance in the dispute, and, if the management and union believe that that would be effective, the service is available.

My right hon. Friend is absolutely right: in the end, whatever the involvement of a third party, it will be down to the management and the union to work out for Royal Mail a future that gets away from the pattern, seen not just once but consistently, of localised disputes, time and time again, over changes that would be normal practice in other parts of industry.

Several hon. Members rose -

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Mr. Speaker: Order. About 20 Members are seeking to catch my eye. There is important business to follow in the form of the Second Reading debate, so once again I am looking for single, short supplementary questions and brief replies.

Peter Luff (Mid-Worcestershire) (Con): Does not the Minister see that the uncertain note that the Government have sounded about the future of the Postal Services Bill must have contributed to the decision of the Communication Workers Union to threaten industrial action? Can he therefore clarify the future of that Bill, which is still languishing under remaining orders on the Order Paper? That would also have the benefit of clarifying the limbo into which Postcomm and Ofcom have been thrown by the delay to the Bill.

Mr. McFadden: During discussions on the Hooper package we were told time and again that there was no need for some of the reforms suggested in it because everyone was up for change. Yet since the Government said that we would not proceed with the Bill at this stage, we have seen not change but a return to the destructive pattern of industrial disputes over change and modernisation in the postal service. There was an opportunity for those who disagreed with the Hooper package to show that change could be delivered, but that opportunity has not been taken up; in fact, the very opposite has happened.

On regulation, we will encourage a closer working together of Postcomm and Ofcom, because the postal service must be seen in the light of the wider communications market. To go back to the point made by the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), there are alternatives, and we are all using them every day.

Geraldine Smith (Morecambe and Lunesdale) (Lab): If Royal Mail's case is so strong, why is it not prepared to go to arbitration? Why is it saying that it will consider it only if the union calls off the strike? That is silly playground posturing. It should get to arbitration, and arbitration should be binding on both sides. This is causing misery for businesses and people up and down the country, and the Government are washing their hands of it. Get in and sort this out!

Mr. McFadden: It is absolutely not the case that the Government are washing their hands of this dispute. We remain in regular contact with the union and the management. Ministers have met union representatives twice in recent weeks, and we are also in regular contact with the management. As I said, ACAS is engaged and stands ready to help, but of course it is easier for it to play a constructive role if the threat of industrial action is lifted.

Mr. Peter Atkinson (Hexham) (Con): Does the Minister have any idea how many postal workers, particularly in London, have second jobs? It is the threat that they might have to work a full shift for which they are paid that is adding to the militancy. [ Interruption. ]

Mr. Speaker: Order.

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Mr. McFadden: It is certainly true that one of the changes agreed in the 2007 agreement is that, instead of the previous practice, which was known as job and finish and sometimes meant people going home a couple of hours before the end of the hours for which they were paid, postal workers would work the hours for which they were paid, which might also mean being more flexible about how they went about their job during that period.

Colin Burgon (Elmet) (Lab): The Minister, in his disappointingly one-sided statement, talked about the need for productive industrial relations. How can there possibly be productive industrial relations with a management who sabotaged the fourth phase of the agreement and who he knows, in his heart of hearts, have no commitment to keeping the service in the public sector and want to privatise it so that they can put money in their own pockets?

Mr. McFadden: Discussions about phase four of the agreement are continuing. That is absolutely essential, because in many ways phase four is more important than phases one to three. Phase four is about the large-scale introduction of walk-sequencing machines that will sort the round by post and, if that change is introduced successfully, place Royal Mail on a par with some of the more modernised postal services elsewhere in Europe.

Mr. Alistair Carmichael (Orkney and Shetland) (LD): Even without yet having had the impact of strike action we have had the alarming news in Scotland that one of the major public sector contracts-the Procurement Scotland contract, which deals with mail to the NHS, colleges and most councils in Scotland-is going to be given to a private sector operator. What can the Minister do to ensure that the haemorrhaging of business from private businesses, to which he referred, does not spread to the public sector?

Mr. McFadden: Competition exists in the postal service, and it will not go away and cannot be wished away. I want a Royal Mail that is fit to win in that market, rather than one that simply wishes competition to go away. The most fundamental challenge to Royal Mail is not competition from other mail companies but competition from other communications technologies. That must lie at the heart of the response to the threatened dispute.

Joan Walley (Stoke-on-Trent, North) (Lab): Everyone listening to the statement will have greeted it with dismay and anger. As long as the Royal Mail is in public ownership, what is done is done in the Government's name. We are talking not about the Premiership but about a precious public institution, so will the Minister instruct Adam Crozier to go to ACAS and get a negotiated solution?

Mr. McFadden: The dismay and anger will be on the part of the public, who cannot understand why a strike should proceed. I have seen a number of interviews about the dispute with spokespeople in recent days, and although various grievances have been outlined, no clear reason has been given why the country, the economy and the public should be facing a national postal strike
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this week. ACAS is ready to play a role, but it will be far better able to do so if the threat of industrial action is lifted.

Mr. Brian Binley (Northampton, South) (Con): Concern is growing that the Secretary of State is deliberately antagonising the union to commit suicide, to pave the way for full privatisation on the basis that privatising a third of the business is almost impossible to achieve. Will the Minister explain why that concern is not justified?

Mr. McFadden: We have been clear throughout that we will keep Royal Mail in the public sector, and there is no hidden agenda to privatise it. We made that clear throughout the debates on the Hooper report.

Mr. Chris Mullin (Sunderland, South) (Lab): Further to that point, I am glad to note what the Minister says about the Government's intentions, but is he aware that there is an underlying fear among postal workers that the long-term objective of management is to privatise and casualise the industry? Can he say anything to allay the fears of the work force on that point?

Mr. McFadden: The best way to allay the fears of the work force is to have a secure agreement about the modernisation of Royal Mail that is implemented. Whether or not third parties are involved, that is what must come out of this. The tragedy is that we could achieve that without a national dispute and the damage that it causes.

Mr. Edward Timpson (Crewe and Nantwich) (Con): The Minister is, I know, aware that the closure of the Crewe mail centre would result in significant job losses that could equate in the current climate to an increase in local jobseeker's allowance claimants of 25 per cent. Does he agree that, for the sake of local employment in a recession, it is important that we separate the original review of the mail centre network from the current dispute?

Mr. McFadden: I am afraid that I cannot agree with the hon. Gentleman that we should put the issue of mail centres on ice. We have pretty much the same number of centres around the country as we had before the internet was invented. I do not know whether he heard what I said in my statement about the fall in mail volumes, but of course that will mean changes to mail centres. I appreciate the effect that that can have in an area if it loses its mail centre, but I have to disagree with him because it would be wrong for the Government to instruct Royal Mail that it had to keep the same number of mail centres for ever and a day when it is trying to introduce change throughout the rest of the company.

John Robertson (Glasgow, North-West) (Lab): I declare an interest: as somebody who was a CWU member for 21 years, I am perhaps not as unbiased as some.

The Post Office and Royal Mail management have been known for years as not being able to get on with their work force, yet we have done nothing about it. We saw on television last Sunday a document come into the public domain that was intended to inflame the situation. Now they are talking about increasing the number of part-time workers, inflaming it even more. Does my right hon. Friend not agree that it is time that they sat
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down, took away such inflammatory ideas and reached a proper negotiated settlement? If ACAS has to be part of that, let us help ACAS rather than use the strike as an excuse.

Mr. McFadden: My hon. Friend is absolutely right to say that there has been a history of poor industrial relations in Royal Mail. Not only did we have a national strike two years ago and various local disputes in between, leading up to the current situation, but poor industrial relations have been a constant feature of the attempt to introduce change in the company.

My hon. Friend referred to a story that was in the media over the weekend. Let me read out Royal Mail's statement on the story:

Bob Spink (Castle Point) (Ind): Will the Minister give an undertaking that any mail that moves to the private sector during the dispute will return 100 per cent. and immediately to Royal Mail at the end of the dispute? Will the Government get off their butt and actually get in touch with Adam Crozier and the management?

Mr. Speaker: Order. May I just gently say to the hon. Gentleman, who is an experienced Member, that one question means one question?

Mr. McFadden: There is no question of our not being in touch with those involved in the dispute. As I said, we have been in regular touch with people on both sides of it. On the question of lost business, the fear for Royal Mail is that people have alternatives. If the company's service is constantly threatened by strike action, the likelihood is that people will use alternatives. I believe that that is tragic for Royal Mail, for our postal service and for the good men and women who work in it.

Mr. David Anderson (Blaydon) (Lab): I am sure that the Minister will agree that everyone should do what they can to cool this down. If that is the case, why does he think that the management of Royal Mail have told workers today that if they attend the picket line on their day off, they will be deducted a day's pay? Is that the way to promote good industrial relations?

Mr. McFadden: I am not aware of the announcement to which my hon. Friend refers. I agree that cool heads are probably required in this situation, because if the strike goes ahead, it will not be in the interests of Royal Mail or those who work in it.

Mr. Douglas Hogg (Sleaford and North Hykeham) (Con): Will the right hon. Gentleman take every opportunity to impress upon trade union leaders that in view of the changes in technology and information communication their only future lies in accepting fundamental and continuing change, and that being so, they do not enjoy public support?

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Mr. McFadden: The frustration of the situation is that everyone says that they are up for change in the face of the technological revolution to which the right hon. and learned Gentleman refers, but when it comes down to it, attempts to implement change are constantly frustrated by disputes. It is absolutely true that Royal Mail and its workers must get beyond that pattern if we are to have a prosperous postal service in future and to maintain the universal service that, as a social glue, is so important to the whole country.

Mr. Dennis Skinner (Bolsover) (Lab): Is the Minister aware that it takes two sides to cause a dispute? Is he aware that the ballot result was 70 per cent. in favour? That is democracy, and it is set against employers who have inflamed the situation by deciding to recruit 30,000 agency workers. I know which side I am on. I am on the side of those who deliver the mail.

Mr. McFadden: My understanding is that the 30,000 people recruited are not agency workers, but that they are directly hired, as Royal Mail hires every year. My hon. Friend is absolutely right-I have huge respect for him-that it will take two sides to negotiate a proper solution.

Talks are taking place today-I said this in my statement-and we welcome that. We hope even at this late stage that a settlement is possible without the damaging industrial action that has been threatened. My message to both sides is this: keep talking, keep focusing on the public, keep focusing on the small businesses that depend on Royal Mail and try to avoid the strike action threatened for later this week.

Mr. Mark Field (Cities of London and Westminster) (Con): I was disappointed by how little the Minister had to say about the protection of the everyday consumer. With that in mind, does he rule out this Government removing the last vestiges of the monopoly that Royal Mail has enjoyed, to the detriment of so many of the consumers who have relied on that service?

Mr. McFadden: Royal Mail does not have a monopoly, and that is the point that I am making. It operates in a competitive environment, and if a strike goes ahead, those who can use alternatives will be more likely to do so. That will be damaging for Royal Mail and it will also damage those who work for it. That is why a strike would be self-defeating, and we should do all that we can to avoid it.

Emily Thornberry (Islington, South and Finsbury) (Lab): Is the Minister aware that in Islington an agreement was reached under which there would be cuts in staff numbers and changes in working practices to pave the way for more machinery-but that the difficulty was that national management walked in and tore that agreement up? That is why the workers there are on strike.

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