Royal Mail

Thursday 17th June 2021 Westminster Hall

[Siobhain McDonagh in the Chair]

15:15

[Siobhain McDonagh (in the Chair)]

I remind hon. Members that there have been some changes to normal practice in order to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for the next debate. There will also be suspensions between each debate.

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Members attending physically should clean their spaces before they use them and as they leave the room. I would also like to remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall.

15:16

[David Johnston (Wantage) (Con)]

I beg to move,

That this House has considered the performance of Royal Mail.

It is a pleasure to serve under your chairship, Ms McDonagh. In some ways, I wish this debate about the performance of Royal Mail was not necessary, and I want to be crystal clear at the outset that I do not think that the problems I will describe are the fault of Royal Mail’s workers. I live in the Didcot area and I have experienced some of these problems, although not nearly as badly as some of my constituents have. I have also seen how hard Royal Mail staff have all been working in my area and right across the constituency. Indeed, when my constituents complain to me, they often say the same thing. They do not blame Royal Mail’s workers, and they have huge admiration for them. However, I have had more complaints about Royal Mail than about any other company or organisation in my time as an MP, so I thought it was important to have this debate.

My constituents have been complaining since 10 August 2020; that was when I got my first complaint. My most recent complaint was on Monday just gone. During that time, my constituents complained about all sorts of post not arriving, and I will give some examples in a minute to illustrate the problem. I think it is right that we take that seriously, because what they have experienced has caused great distress. I naively hoped that when I called a meeting with Royal Mail headquarters towards the end of last year, that would resolve it. I had no idea how widespread the problem was and how many areas of the country were affected, albeit that it is not all areas.

To give a sense of what has been happening, the complaints in my constituency have been concentrated in the Didcot area, the Wantage and Grove area and some of the villages surrounding Wantage, and there have been bits in Cholsey and Wallingford, too. The very first complaint that I got on 10 August was from a man called Sean, who lives in Didcot. He wrote to me because he has a two-year-old son who is deaf. Sean relies on the post because he regularly needs moulds that hold his two-year-old son’s hearing aids. His family also have a series of hospital appointments that they need to attend, and he has found himself in the situation both of missing hospital appointments because the letters did not arrive on time, and of turning up at the hospital for appointments that were not happening, because he did not get the cancellation letters on time. We can understand how distressing that is, and it is having a knock-on effect on services such as the NHS.

My constituent Ann and her husband, who live in Wantage, did not get their 65th wedding anniversary cards. As I have said in the House before, anyone who gets to 65 years of marriage ought to be getting their anniversary cards on time. Much more sadly, my constituent Matthew’s wife died last year and he did not receive the condolence cards or the death certificates on time.

I have constituents who have not had their insurance renewals, meaning they have ended up having to pay more for their insurance. One did not get his bank card, so he could not pay for anything when he was out and about, and had to go online each time he made a payment. Constituents have complained that they have not received mail for one, two or three weeks, and they sometimes go to the sorting office and are handed that mail. One recent complainant has still not had her Christmas post.

It is common for constituents to downplay such situations and say, “I suppose it’s only trivial, you know. I haven’t had my Christmas cards but it is only trivial.” I do not think it is trivial at all. We all appreciate the importance of medical appointments arriving by post, but things such as magazine subscriptions really matter as well. They bring joy to people, and cards are also hugely important to mark occasions. A whole range of constituents have not had birthday cards arrive, often for significant birthdays.

This is clearly not happening in all areas of the country. Royal Mail’s recently published official figures say that on their first class delivery target, which is 93%, they actually hit 74.7%. In the figures I have looked at, that is the lowest level for a considerable time. Covid is part of that, but I do not think it is only covid. I have given Royal Mail a right of reply, so I will come to what it feels the problems are later. Royal Mail’s national complaint figures also show a huge spike in complaints.

I do not think covid is the only reason for that. When we look at the data, Royal Mail has not hit that first-class delivery figure in six of the last 10 years. It has not hit its delivery completion target in nine of the last 10 years. It is even the same with special delivery. We have all been to the post office and had that talk from the person behind the counter, who says, “Well, if you really want it to get there on time and if you really want to make sure that it gets there, you should go special delivery, although it is lot more expensive.” However, Royal Mail has not hit that target in the past 10 years, although admittedly that is a much higher target to hit and it hits the target a high proportion of the time.

The experience of the past year is particularly frustrating as the Royal Mail has just recorded record profits. I was not eating cornflakes that I could choke on at the time, but I was surprised to open the newspaper and see the headline, “Royal Mail profits treble.” The price of a first-class stamp has gone up a third in the last five years, including a rise of 12% this year. The fall in service is difficult to reconcile with the increase in Royal Mail’s profits.

I do not work for Royal Mail, so I cannot say exactly what the problem is, but I think part of it is to do with its prioritising parcels. When I met Royal Mail representatives last year, they said to me, “We have gone from being a letter service that delivers parcels, to a parcel service that delivers letters.” They said that if I had been able to visit the sorting office, I would have seen things like washing machines and big screen TVs being delivered.

That is a business decision for them, but it is frustrating for constituents, who have reported to me that they have not had any mail for two or three weeks, but they have seen Royal Mail staff and vans delivering parcels and much bigger items. A number of them have spoken to their local postmen and women, and been told confidentially, off the record, that they have been told to prioritise parcels over other mail.

We have to work out what the problem is, and ensure that Royal Mail deals with it and that we do not just write it off as being something to do with covid. I contacted Royal Mail and the Communication Workers Union to ask for their opinions. Royal Mail says that the issue is a combination of covid-related absences, the social distancing requirements—meaning that it cannot have as many people in its buildings—and the increase in the number of parcels. That increase has been of 32%, in part because everyone is at home and sending each other stuff, although that might in part be the Royal Mail business decision to develop that aspect of its work, no doubt contributing to its profitability in the past year. That cuts both ways.

I wanted to have this debate because my constituents often feel fobbed off when they complain to Royal Mail directly. They do not get something that answers the question. One constituent told me that one response it got amounted to, “We’re trying but it’s not our fault.” I wanted the debate so that I can ensure that Ministers are aware of what is going on and of my constituents’ experience. In my constituency alone, I would like Royal Mail to review the operation and perhaps invest some of its profits in it. Do we need more staff? Do we need bigger service centres? If parcels are taking up too much space, so they have to get them out, do they need bigger delivery centres? We certainly need to work out what is going wrong.

We could have a simpler process for compensating constituents, perhaps an automatic one—Royal Mail knows when it is delivering something very late, because it has to report on that figure. It should therefore know when those people ought to be compensated automatically. It is important that Ofcom does not allow that to be written off as, “Well, it’s covid, don’t worry about it.” I understand why it has given a dispensation to Royal Mail this year to say that covid has imposed a particular burden, so it will not be held to that 93%” but some of my constituents would say that it had problems before covid. It is not good enough to write it off as covid.

In the end, Royal Mail has a near monopoly on that type of post. Our constituents cannot go anywhere else—they can with parcels, but not with the things involved in the problems they have been experiencing. Again, I do not hold Royal Mail’s workers responsible, but Royal Mail HQ—under pressure from the Government and Ofcom—needs to provide the service that our constituents are paying an increasing amount for all the time.

15:27

[Helen Hayes (Dulwich and West Norwood) (Lab)]

It is a pleasure to see you in the Chair, Ms McDonagh, and I congratulate the hon. Member for Wantage (David Johnston) on securing this important debate.

I pay tribute to postal workers up and down the country for all that they have done throughout the coronavirus pandemic. Postal workers have been on the frontline. They have faced additional risks, and I know that the rate of coronavirus infection among postal workers has been significant. They have continued to provide vital delivery services and, more than that, have been a vital source of human contact for many people who have been self-isolating while living alone. Sometimes, they are the only person able to flag concerns about the health and wellbeing of residents. We all owe our postal workers a huge debt of gratitude.

It is worth noting how utterly inappropriate it was that, while Royal Mail’s frontline staff were continuing to deliver for the public, the then chief executive was spending the lockdown in Switzerland. I know that Royal Mail has undergone a change of leadership in recent months, and that is certainly very welcome.

My constituents understand the severe difficulties presented by the pandemic for all our public services, and Royal Mail is no exception. They understood the suspension of the universal service obligation in order to enable Saturday deliveries to be paused. They even understood when deliveries in some areas took place every other day, rather than daily. There is a great deal of good will and support for our postal workers. However, the problems experienced in parts of my constituency have at times dropped well below even a basic level of reliability. That is the issue that I will focus on, as well as the significant problems I have encountered with the monitoring and regulation of Royal Mail.

My focus is on the severe problems in the SE22 area of my constituency. Although there have also been periods of significant problems in SE19 and SE27, my understanding is that those have been primarily due to sickness absence linked to the pandemic and were relatively quickly resolved. The problems in SE22 run much deeper.

In 2017, Royal Mail announced its intention to close the SE22 delivery office, which serves East Dulwich, part of Dulwich Village and part of Peckham Rye, and merge it with the SE15 delivery office in Peckham. The local community protested against the plan, concerned that the SE15 office was difficult to access and very remote from some parts of SE22, and that it would be difficult for postal workers to complete their rounds because of the long distances and hilly nature of the routes between SE15 and parts of SE22. Royal Mail pressed ahead with the merger anyway just before the Christmas period in 2018, leading to a disastrous level of service at that time and chaos for many months afterwards. All the warning signs were there that Royal Mail’s arrangements for deliveries to SE22 lacked the resilience to cope with challenging circumstances.

At the start of the pandemic, delivery services in SE22 became completely unreliable, with residents on many different streets across the postcode area reporting that they were not receiving mail on a regular basis, sometimes for weeks at a time. That was a completely different scenario to pausing Saturday deliveries or even delivering only on alternate days, which residents would have understood completely.

The consequences for my constituents went way beyond inconvenience, though there was certainly plenty of inconvenience. The problems caused deep distress: older people living in isolation did not receive birthday cards and gifts; legal documents went missing; hospital appointments were missed; hospital appointments that had been cancelled due to the pandemic were still attended because the cancellation had not been received; death certificates went missing. One constituent had to attend court because she had not received a speeding fine in time to be able to pay it.

I have raised these issues with Royal Mail on behalf of every constituent who has been in touch with me. I have met Royal Mail on many occasions to seek answers and I visited the SE15 delivery office. It has been enormously frustrating that, although Royal Mail has responded to each individual query, it has never accepted the extent of problems with the service in SE22 or the impact on my constituents.

I have taken the matter to Ofcom, who also seemed powerless to intervene, largely due to the suspension of the universal service obligation. I hope the Minister will understand that there is a huge difference between pausing Saturday deliveries or delivering every other day and not providing any deliveries at all for weeks at a time. The accountability framework for a regulated service really should be able to account for that.

I have pieced together some of the problems and the action that Royal Mail could have been compelled to take if there had been more regulatory intervention. The first is not to have closed the SE22 delivery office in the first place, or to have been obliged to re-provide it in a more convenient location for SE22. There is currently no requirement for public consultation on the closure of delivery offices, and the requirement for the geographical coverage of delivery offices is too wide to protect an area such as SE22 from disastrous commercial decisions, and too wide, really, to be workable for an urban area such as London.

Once the severe problems became apparent last year, Royal Mail could have been required to explore temporary premises to alleviate the problems in the SE15 office, which were in part due to social distancing requirements, but it was not obliged to do so. It is also clear that over-reliance on vehicle sharing was a large part of the problem in SE22. Parts of SE22 are just too far away from the current delivery office to enable postal workers to set off by foot and complete their round within their shift.

Coronavirus meant that van sharing was no longer safe, but there was no requirement for Royal Mail to address that—as it did much later to good effect, by acquiring additional vehicles—apparently leaving large parts of SE22 unreachable for weeks at a time. It is also clear that staff sickness was a significant problem, as it was across many frontline services, but, again, there appeared to be no requirement on Royal Mail to take on additional staff to cover, despite the fact that it was responsible for a regulated service.

Finally, I want to flag immense problems with monitoring and accountability. Royal Mail has refused to provide me with performance data for the SE22 delivery office, despite problems over many months, which means that it is impossible to compare the experiences of my constituents against Royal Mail’s actual performance. The information provided by Royal Mail has often been far too broad to be properly transparent or useful. Royal Mail only publishes performance data at the level of south-east London, which is a huge area and entirely masks the variation in performance within individual postcode districts.



Royal Mail has been through a challenging time in recent years, due to competition from private delivery companies, but its fortunes have significantly improved during the pandemic and it recently reported record profits. As things stand, it will not be compelled to spend any of its profits on investing to deliver effective, reliable services for my constituents in SE22.

Royal Mail provides a regulated service, which is absolutely vital for residents and businesses across the country, and it is important that it is effectively regulated. I ask the Minister to look again at the regulatory framework for Royal Mail, in order to introduce a requirement for meaningful public consultation on proposals to close or move delivery offices, to tighten the rules on the geographical coverage of delivery offices in urban areas, and to introduce new performance data requirements to enable Royal Mail to be held to account in a meaningful way at the level of individual postcode districts.

15:35

[Catherine West (Hornsey and Wood Green) (Lab) [V]]

It is a pleasure to serve under your chairmanship, Ms McDonagh, and to contribute to this debate, which the hon. Member for Wantage (David Johnston) was so effective in securing.

It is also a pleasure to follow my excellent colleague, my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes). Like her, I have carried out a number of visits to staff in the delivery and sorting offices in my constituency, and I have enormous respect and gratitude for the work that is being done to keep things going, particularly during covid, by staff, managers and everyone else at Royal Mail.

However, there are a number of concerns that I, too, have received correspondence about. In total, 130 constituents have written to me to report issues, particularly around the second and third waves of covid in the winter of 2020-21, and especially in the N4 and N8 postcode areas. As we have heard this afternoon, there have been a number of discrepancies that cannot be fully accounted for by the pandemic alone. For example, we have seen that the letter and parcel delivery that was supporting people who were shielding often fell short of what we would have expected. The delivery of invitation letters to the first few cohorts of people eligible for the vaccine was also reliant on the postal service and it sometimes failed. That highlights why the deterioration in services experienced in our constituencies is so frustrating, painful and potentially dangerous for residents.

My constituents have reported severe consequences resulting from the deterioration in Royal Mail services, such as fees for late payment of utility bills, when they had not received the original letter bills; being fined for non-payment of penalty charge notices, when they had not yet received the original letter informing them of the PCN being issued; and late receipt of personal identity, medical and legal documents having an impact on their ability to submit in-time applications—for example, for self-assessed tax registration or to gain access to medical treatment sooner. There have also been issues with passport renewal services, legal appeals and delayed receipt of consumer goods and gifts, which was particularly upsetting around Christmas time, when we were separated from family members. There has also been anxiety about financial security because newly issued credit and debit cards went missing in the post. I hope that this situation can be rectified.

I would also be grateful if, in summing up, the Minister could assist my constituents and me with a particular issue. The delivery office opposite Hornsey railway station was closed during the coalition years. There has been an ongoing campaign, led by myself and our local ward councillors, to have it reopened. The original building is no longer available, but there must be a suitable building available somewhere locally. I know that there are a number of empty shops on the high street in Hornsey, which could be perfectly appropriate for a delivery office. It is much more efficient, from an energy point of view, to have people popping into a delivery office than endless parcel vans coming to people’s doors.

Now that Royal Mail’s finances have improved—indeed, it is enjoying record-breaking profits; I believe they have trebled—I also want to press the Minister for increased numbers of apprentices and staff to be taken on and paid competitive rates, so that we can make good on what has been a pretty dismal record in the last 15 months. I would also like to see increased training and support for staff, and of course, on weekends, an increase in the number of people delivering mail. We still have a youth unemployment problem in Hornsey and Wood Green, so I want young people to have job opportunities in the Royal Mail, which is a good employer normally. I hope that management will grab that issue with both hands.

I conclude simply by reminding the Minister of the specific request from my constituency, given that it has been particularly badly affected by the situation I described. We would like to see the return of a delivery office in the N8 area so that the Royal Mail can make good on its commitments and obligations. I would also be pleased to hear what further action can be taken by MPs and our staff when things go wrong, because I am concerned that our regulatory framework seems a mismatch for what is quite a desperate situation for many of our constituents?

15:40

[Stephen Flynn (Aberdeen South) (SNP)]

It is a pleasure to see you in the Chair, Ms McDonagh. I pay tribute to the hon. Member for Wantage (David Johnston) for securing this important debate. He certainly got his points across to the Minister, and I certainly hope that the Minister will respond to them in full. Indeed, the points raised by all three speakers have been clear and substantive, and they have outlined the concerns that they and their constituents most definitely have in relation to the performance of Royal Mail.

I had a discussion last night with a colleague in and around the Royal Mail. It is not often that, as nationalists, we talk about British institutions that are perhaps more favourable in our eyes. Of course, in that regard, the Royal Mail is something that the public loves and has loved for many decades, if not centuries, in its previous guises. I think we actually compared it to Concorde, in terms of its being the only two British institutions that we were perhaps in favour of. That is probably the only time the Royal Mail has been compared to Concorde, but the wider point is that it is an institution that, across the UK, we all hold in extremely high regard. However, the Government betrayed that high regard in 2013 when they sought to privatise the Royal Mail—a disgraceful decision that has not, to the best of my knowledge, been mentioned in the debate so far today, which I think is remiss. In many ways, that could be the root of some of the problems for us as Members of Parliament and for the public in terms of influencing the direction of the Royal Mail’s priorities.

As we can see and as we have heard, the Royal Mail’s performance in meeting its targets for first-class deliveries, and second-class deliveries as well if I recall correctly, has not been up to scratch. The pandemic has obviously played a role, but Royal Mail was not meeting its targets in the years prior to that; it was close, but it did not meet them. We have heard the consequences of that for individual constituents from the three previous speakers. Indeed, I have been contacted by constituents as well, as I am sure all Members have, in relation to absolutely essential items that were not delivered.

Although we have seen Royal Mail struggle, we have the converse situation with its profits, which are at a record high—I believe it made a £762 million pre-tax profit, which is absolutely remarkable. The hon. Member for Wantage was absolutely right to highlight that in terms of what Royal Mail’s priority is at this time. If it is parcels, it should be clear, open and transparent about that, and the public could determine whether that is a suitable priority for the organisation. At the risk of repeating myself, it would be more beneficial if this place had more of a say in that. Of course, it does not, because of decisions taken in previous years, but we are where we are.

The issues that have been highlighted are pertinent, and it would be remiss of me as a local Member in Aberdeen not to mention the closure of post office counters. I am of course very cognisant of the fact that the Royal Mail and the Post Office are separate, although the Government do have some control in relation to the Post Office. However, I should reflect on the fact that post office counters in Aberdeen are being closed, in Torry and in Kincorth in my constituency. That is deeply, deeply frustrating and will leave those communities behind, to the detriment of the people who live in them, just as the performance of Royal Mail will be to the detriment of the constituents from across the UK we have heard about.

I will bring my remarks to a close because I am conscious that much of what can be said has already been said, but I want to finish on an important point that the hon. Member for Dulwich and West Norwood (Helen Hayes) made at the outset of her remarks. We must pay tribute to the staff for the work they have done over the course of the pandemic. I cannot imagine how difficult it has been for them to manage the workload, taking into account social distancing, their own pressures and the outbreaks that have undoubtedly happened in Royal Mail facilities, as they have everywhere else. I place on the record my thanks and tribute to them. I wish them well going forward.

15:45

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a great pleasure to serve under your chairship, Ms McDonagh. I congratulate the hon. Member for Wantage (David Johnston) on securing this important debate. This will be the first time that I have spoken as shadow Minister for postal affairs, and I pay tribute to my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) for all her work on this critical service.

Every Member who has spoken has emphasised the importance of Royal Mail to communities and businesses across the UK, as seen most recently and indeed currently, during the pandemic. In the face of covid-19, our local posties stepped up as key workers, keeping us connected, enabling small businesses to continue trading, and playing a vital public health role. Royal Mail delivered and collected tens of millions of covid-19 tests, distributed 1.5 billion items of personal protective equipment to our frontline workers, and delivered more than 300 million vaccination letters. I thank Royal Mail staff for their commitment during the pandemic, and reassure them that, as this debate has shown, it has not gone unrecognised. I pay special tribute to the posties whose smile and cheery hello, despite their higher rate of covid as a consequence of their frontline work, was for many the only real human contact during the darkest days of lockdown.

Royal Mail traces its history back to 1516, when Henry VII introduced a master of the posts. Under state control, Royal Mail successfully established itself as a leading and innovative pioneer in postal services, achieving many global firsts, such as the first uniform postage rate in 1839, and the creation of the world’s first stamp in 1840—my understanding is that that is why the UK is the only country that does not have its name on the stamp, but just the Queen’s head. There was also the introduction of first and second-class letter services in 1968, and the launch of the UK’s first digital stamp in 2004. Today, Royal Mail connects more than 30 million addresses across the UK, employing more than 160,000 staff.

In 2014, however, the Tory-led coalition chose to privatise the postal service. That mistake is estimated to have lost the taxpayer £1 billion, according to the Business, Energy and Industrial Strategy Committee. Labour fought against that, arguing that privatisation would prioritise profit over services. Unfortunately, that has become a reality, which is why Labour remains committed to supporting the public ownership of Royal Mail.

As many have pointed out, Royal Mail recorded record profits—the newly appointed CEO takes home £525,000 per year—but consumers and workers have paid the price with rising costs, longer delivery times and job losses. In the last year alone, there have been two above-inflation increases to stamp prices. In January, as the hon. Member for Wantage pointed out, the price of first-class stamps increased by 12% to 85p, while various operational changes, such as online stamp printing, the reduction of opening times and the closure of sorting offices, saw 12,000 jobs lost by 2017. That is in addition to the loss of 2,000 managerial roles as a result of restructuring during the pandemic.

I am also the shadow Minister for digital, and I know all too well the impact of digital exclusion on the UK and how Royal Mail allows many excluded communities to remain connected. Between 2013 and 2017, the closure of 75 delivery offices disproportionately impacted those who rely on them most, as my hon. Friend the Member for Hornsey and Wood Green (Catherine West) emphasised. As delivery offices play the important role of ensuring that undelivered mail can be conveniently collected by the recipient, their closure often causes avoidable stress for individuals who are forced to travel further and owners whose businesses require the frequent collection of parcels, as my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) pointed out. Workers have also been collateral damage in Royal Mail’s mission to maximise profits. In 2018, after months of disputes between Royal Mail and the Communication Workers Union, a package covering pay, pensions and working conditions was agreed to. Despite union members voting overwhelmingly in favour of the deal, Royal Mail abandoned the agreement in 2019, leading to the biggest vote for national industrial action since the passing of the Trade Union Act 2016. The Communication Workers Union has worked hard to reach a new agreement. What steps is the Minister taking to ensure that Royal Mail management has a better grasp of effective industrial relations and supports good jobs, as emphasised by my hon. Friend the Member for Hornsey and Wood Green?

Royal Mail is the UK’s sole designated universal service provider. That is an honour and a privilege, and means that it is so important to our communities. It remains the UK’s largest postal operator: 75% of small and medium-sized businesses surveyed by Ofcom in 2020 cited Royal Mail as their main postal services provider. Although letter volumes declined by 25% during the pandemic, the demand for parcel delivery increased by 32% as consumer behaviour changed.

We heard from the hon. Member for Wantage anecdotal evidence of parcels being prioritised by Royal Mail. The UK parcel market is highly competitive. Although Royal Mail continues to hold the largest share, at 35%, other providers, such as Amazon and Hermes, are on the rise. What recent assessment has the Minister made of competition in this market? What impact does cross-subsidy, which is prevalent in Amazon’s retail sector, have? What is the impact on the environment and our climate change commitments of charge-free delivery, which is associated with, for example, Amazon Prime, which encourages parcels to be ordered and delivered individually?

As we have heard, posties have worked tirelessly through the pandemic. We have also heard disturbing details about the service disruption resulting, at least in part, from higher levels of sickness absence. In 2021, Royal Mail missed the 93% target for first-class mail being delivered the next working day by eight percentage points. Members highlighted that, behind that statistic, there are particular areas of very low performance, which has had an unspeakable impact on our constituents’ lives. That was particularly highlighted by my hon. Friends the Members for Dulwich and West Norwood and for Hornsey and Wood Green.

Does the Minister think Royal Mail did all it could to inform people of service disruptions? How can we better hold Royal Mail to account for the impact of that disruption? Royal Mail was not penalised during the past year because of the pandemic, but in 2018-19, Ofcom fined it £50 million for failing to reach first-class delivery targets. As we have heard, it consistently failed to meet targets, particularly in relation to special delivery, in the three years prior to the pandemic.

To improve its performance, Royal Mail has invested approximately £2 billion in modernising operations since 2013. That is to be welcomed but, despite that, Ofcom’s analysis of Royal Mail efficiency in 2020 found that it failed to meet its own productivity targets. Ofcom warned that, unless Royal Mail modernised its network to ensure that it served rural and urban spaces equally,

“the sustainability of the universal service could be at risk in the longer term.”

What steps is the Minister taking to ensure that the universal service delivery requirements are fit for purpose in relation to changing markets and consumer needs, and does Ofcom have the appropriate powers to monitor and enforce it, as Members have highlighted?

Before I close, I think it is worth mentioning the Horizon scandal, which was the largest miscarriage of justice in our history, with more than 900 false prosecutions, destroying lives, families and reputations. When the Horizon service was commissioned in 1999, the Post Office and Royal Mail were still operating under the same ownership and management structure. I hope that the Minister will confirm that Royal Mail is also learning the lessons of that scandal.

Finally, the Minister and I have discussed postcodes through parliamentary questions. In privatising Royal Mail, the Government also privatised our postcodes, and on the cheap. Royal Mail charges for access to the postcode address file even though much of the intellectual property comes from the local authorities who assign addresses. The Government’s national data strategy says that we will encourage data sharing, opening up data; yet this remains a significant barrier to communication, location and innovation, so what steps will the Minister take to address that?

Royal Mail is a UK institution of which we have been proud for hundreds of years, but this Government have failed to treat it with respect or care. Despite its importance to communities and the economy, the Government are failing postal service users and communities, putting ideology above competence in their privatisation, and now their monitoring and accountability to maintain the quality of services. Unfortunately, that is a theme with this Government. We have become all too familiar with the privatisation of profit and the socialisation of risk. Labour is committed to supporting a better postal service under public ownership.

15:58

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I thank my hon. Friend the Member for Wantage (David Johnston) for securing today’s important debate about the performance of Royal Mail.

I echo all the thanks and admiration of the important role that postal workers have played in serving customers and supporting local communities right across the UK, in normal times and, clearly, during the coronavirus pandemic. Their willingness to maintain deliveries and do their day-to-day work at a time of increased social isolation, when many people could not leave their homes, has been vital. The Government have relied on their continued service to keep people connected across the country, delivering the letters and parcels that are so important to everyday life and supporting the economy in these unprecedented times.

My hon. Friend talked about the importance of post, as did the hon. Member for Hornsey and Wood Green (Catherine West), whether it is cards for life events— celebrations, commiserations and condolences—or important issues around tax, insurance and hospital appointments. I hope that his constituents who celebrated their 65th wedding anniversary—please pass on my best wishes to them—got their cards in the end. I suspect, having reached their 65th wedding anniversary, they know how to practise patience and forgiveness, so I am sure that they were in good stead while waiting to get to that point.

I want to talk a bit about the situation of the service, and the context of where we are at the moment, before I answer some of the points that have been raised. Royal Mail has well-established contingency plans to mitigate disruption to postal services. As we have heard, those plans are overseen by Ofcom, which is the independent regulator. It is important to remember that it is an independent regulator, because that independence is key to ensuring that Ofcom keeps Royal Mail on its toes and does its job as an effective regulator.

Royal Mail has reassured the Government that it has been doing everything it can to maintain service levels during this period and that it continues to keep Ofcom informed, but as we have heard, there are issues that still need to be addressed. We will continue to challenge Royal Mail, and I will expect Ofcom to be doing exactly that under the framework, but I will talk a bit more about the regulatory framework in a second, in response to some of the questions that have been raised.

The changes made to Royal Mail’s operations due to disruptions are an operational matter for Royal Mail. Therefore, it is up to Ofcom to monitor those service levels in the first instance. In November 2020, Ofcom published its user needs review of postal services. In that report, Ofcom noted that the majority of users are satisfied with the postal services that they receive from Royal Mail. Among residential users, overall satisfaction has remained over 80% in the past few years. Among SME users, overall satisfaction with the quality of services they receive has increased markedly since 2012. That is the important thing. I understand the ideological debate about privatisation, but studies of postal services around the world considered Royal Mail to be 40% less efficient than other national equivalents at that time. As the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) said, we have seen £2 billion invested since then, and an extra £1.8 billion has been promised for further investment.

In 2010, a mere 8% of post was sorted by machine, compared with 85% for leading EU operations. The figure is now 90%. Imagine having a nationalised Royal Mail at this point in time, when it is competing for the funds its needs against schools, hospitals and all the other services that the public sector has to provide. The extra money that has come in for investment is clearly to be welcomed.

The regulatory conditions that require Royal Mail to deliver letters six days a week as part of the universal postal service also provide that Royal Mail is not required to sustain those services without interruption, suspension or restriction in the event of an emergency. Ofcom has acknowledged that, in the context of the covid-19 pandemic, it is indeed an emergency. As such, the regulatory framework allows Royal Mail to modify its obligations. That includes the temporary reduction in the frequency of the delivery of letters, which Royal Mail implemented for six weeks in 2020 without formal authorisation, because it considered it necessary to respond to the challenges faced in maintaining the postal services at the height of the pandemic. Ofcom published a statement on its website in April 2020, and a further statement in January this year, clarifying that the regulatory framework supported Royal Mail’s actions.

Throughout the pandemic, Royal Mail has been transparent with the public about any changes to the services it provides, and the information can be found on the Royal Mail website. We have heard about the dangers of the digital deficit, and clearly there is always more that we can do to ensure the information gets to people, rather than people having to find it. We will always work on that, and it is incumbent on all of us, as elected leaders in our communities, to ensure that we get the information to colleagues across the House, so that we can help amplify those messages to our constituents. These are clearly areas that we can look at.

It should therefore come as no surprise that when Royal Mail published its quality of service results last month, it had not met the universal service obligation targets for the delivery of first and second-class mail. Royal Mail reported that that was due to high levels of covid-related absences and shielding; the introduction of social distancing in its operations, as we have heard; no shared vans; and the increase in parcel volumes, which went up an incredible 32%. As has been said, the change in postal services over the past few years is that parcels are driving profits among Royal Mail’s competitors. Indeed, that is a main contributing factor to the financial performance of Royal Mail in recent months.

In light of all those factors, it acknowledges that at times its quality of service has not always been how it might have wished, especially in areas with higher levels of local covid infections. Despite that, clearly, postmen and women worked exceptionally hard to ensure that the delivery of covid-19 test kits were prioritised. Royal Mail implemented Sunday deliveries and collections, resulting in next-day delivery for covid-19 test kits exceeding 98%. In addition, it prioritised the delivery of NHS vaccination letters and election mailing, doing its best to ensure that service delays did not have an impact on those important communications.

Let me take some time to say something about the particular concerns of my hon. Friend the Member for Wantage about the delivery service in his constituency. I must admit that, in the lead-up to the debate, I spoke to my two-man focus group in Great Coxwell—my former parents-in-law—and they said they were sometimes a few days behind during covid. In general, it has been okay, and is now back to pre-covid levels. That goes to show that, even within a constituency, there are patches where things are seemingly okay and clearly patches where there are still significant issues, as my hon. Friend eloquently highlighted, and we need to tackle them. We cannot look at one area in isolation, so he is right to drill down into those areas.

I have been informed by Royal Mail that the service in the Wantage area was disrupted due to sickness absence levels in some parts of the operation remaining higher than normal. That was exacerbated by necessary changes to the business operations and difficulty with additional recruitment. There are 10 postcode areas in Wantage and 10 delivery offices to service them. In the Wantage area itself, sick absences peaked at 15%. I am pleased to report that, as of last week, that absence rate has gone down significantly and is at levels that Royal Mail expects at this particular time of year.

To provide a snapshot of disrupted service levels and how far more Royal Mail has come to improve them, let me cover three areas quickly. Per day, the Wantage delivery office covers 29 delivery rounds. In December, on average, seven delivery rounds could not be completed per day; in April, that was at most one delivery round per day. The Didcot delivery office, which my hon. Friend mentioned, per day covers 38 delivery rounds. In December, on average, 10 delivery rounds could not be fully completed per day; in April, that was at most three delivery rounds. The Wallingford delivery office has 39 delivery rounds. In April, there was a high level of sick absence, and that clearly had an impact on mail deliveries and deliveries were rotational, happening every other day. As of May, however, mail deliveries have been taking place six days a week to all addresses served by all three of those delivery offices.

In addition, Royal Mail continues to use agency support, as well as to hire vehicles to alleviate any pressure on staff, so that it can maintain the best possible service. At the Wantage, Didcot and Wallingford delivery offices, 14 permanent roles have been created and, to date, six of those new recruits are in post. Clearly, however, when I asked those questions, Royal Mail also assured me that if for any reason an address does not receive a mail delivery one day, it will be a priority for the next working day.

Royal Mail is open to engaging with the public and, indeed, with all MPs about delivery services in their respective constituencies and across the UK. I enjoy going to my local delivery offices whenever I can in Sutton. I am pleased to hear that my hon. Friend the Member for Wantage is going on a site visit tomorrow in Didcot, so I hope that he finds that productive in following up this conversation and this discussion, because it is important that we scratch beneath the surface. Yes, we get the assurances, but it is only by going to see people with those further questions that I hope he will get the answers that he needs and that he will be able to put his constituents’ views—as I know he will, admirably —to the managers in that delivery office.

The postmen and women who serve Wantage and across the UK have continued to dedicate themselves to providing a key public service. Royal Mail more broadly, has done its utmost to deliver on its universal service obligation, while observing health and safety advice. Royal Mail has been transparent about changes to its service, as I said, but it acknowledges some disruptions to delivery, mainly but not solely—as we heard—due to the extenuating circumstances generated by the pandemic. However, we have also seen changes in consumer behaviour, including the rise in online shopping. Royal Mail’s financial report, published last month, highlighted that parcels represented 72% of its UK revenue in the previous financial year, increasing from 63% in the financial year 2019-20. That has largely been driven by changes in behaviour through the pandemic. Increases in e-commerce have further added to the demand for parcel delivery services: a study by Royal Mail found a 7% increase in company start-ups in March to July 2020, compared with the same period in 2019. Of 315,000 new companies, nearly 16,000 were e-commerce.

The pandemic is an emergency situation that has required Royal Mail to be flexible, make the necessary adjustments and respond effectively to demand. Royal Mail has clearly done its best to maintain service levels during a situation outside its control, but that is why the regulatory framework provides that flexibility to manage emergency situations, and why Ofcom indicated its support for the measures Royal Mail has taken to respond. Ofcom also noted that Royal Mail did not meet its quality of service standards in 2020, but that performance has improved considerably in recent months as covid impacts have started to recede. Ofcom considers that timings for a return to pre-covid performance standards are likely to align with further guidance on social distancing; indeed, I spoke to its chief executive about that just yesterday. Ofcom has reassured me that it continues to scrutinise performance closely, and that Royal Mail is actively implementing a recovery plan that includes operational changes and the use of additional frontline staff.

When looking at the future regulation framework, Ofcom clearly needs to ensure that postal regulation keeps pace with changes in the market and remains relevant, a point raised by the hon. Member for Dulwich and West Norwood (Helen Hayes). We last reviewed the regulatory framework for post in 2017, and agreed at the time that it should remain in place until 2022. Ofcom is now carrying out the review of the future regulatory framework for post, which it aims to complete in 2022. As part of that review, Ofcom will consider whether extra consumer protections may be required, and is seeking views on the future regulation of the parcels market: a call for inputs closed in May 2021. Ofcom will publish a full consultation on the future regulation of postal services later this year.

The hon. Member for Newcastle upon Tyne Central talked about postcode data, which is something we have spoken about in the past. It is a really interesting point that we need to work on, because in the era of open data, we have to make sure that that open data is available, without one company seeking to profit from intellectual property that has been developed over a period of time. I am looking forward to continuing that discussion with her.

The hon. Member for Hornsey and Wood Green raised issues about the N8 area, as she has done before. I know that people at Royal Mail—I was going to say “avidly read Hansard”, but that is a little bit much. [Laughter.] It is essential lockdown reading. However, I know that they look at the coverage and debates in this House, so they will have heard about the campaign that the hon. Lady has been running to make sure that her constituents in the N8 area and the surrounding area are well served. I believe the last time we spoke about the SE22 area was in November 2020, when I participated in a debate led by the hon. Member for Dulwich and West Norwood. It was interesting to hear the update about what is happening in that area with her constituents, and I know that the hon. Lady will continue to lobby and campaign on behalf of those constituents to make sure they get the service they deserve.

We know that the Royal Mail needs to continue to modernise as people are moving towards parcels, but we cannot forget those essential letters and that essential correspondence. Yes, fewer people are relying on them, but those who are relying on them are in many cases the most vulnerable in society and the most dependent on that social contact and social value, as well as the essential services that are still provided by post. Clearly, delays in postal service deliveries can be frustrating, and they can have serious consequences. We have heard some examples from those who are reliant on the post for important information, including for start-ups and small businesses, who are trying to build their businesses and develop a reliable, remote offer to their customers.

Following the debate we had here last week, I do not doubt the issues in the highlands and other remote areas about the cost of delivery for parcels. The service for letters must also remain, through the universal service obligation.

The past year and a half has presented exceptional challenges and has led to the disruption of services, but the postal system has continued to operate, and Royal Mail is able to resume service levels now that absence levels are closer to normal and the business has adjusted to operational changes. On behalf of the Government, I thank once again all the Royal Mail postal workers and Royal Mail itself for the dedication and commitment shown while providing continued service throughout the pandemic.

16:15

[David Johnston]

I am grateful to everybody who has taken part in the debate this afternoon. It has been a good debate. The hon. Member for Dulwich and West Norwood (Helen Hayes) spoke for all of us when she said that we owe our postal workers a huge debt of gratitude for the work they have done during this period. She was quite right to say there is a difference between pausing deliveries on Saturdays and not delivering anything for weeks at a time, which has been the experience in Wantage and Didcot. I support her request for postcode-level data on deliveries.

The hon. Member for Hornsey and Wood Green (Catherine West) detailed very well the impact of delays and the sorts of things that have been delayed, from shielding letters to vaccination letters. It was a very good idea that Royal Mail should create more apprenticeship positions and support young people, thereby also improving the service.

I am grateful to the SNP spokesperson, the hon. Member for Aberdeen South (Stephen Flynn). He and I do not agree on the number of British institutions that are worthy of high regard—I am sure that is no surprise. We also do not agree on the privatisation, because there are some public services that I could complain about today, but where I do agree with him is, if Royal Mail’s priorities have changed to parcels, it is important that it is honest about that. That is what my constituents feel they can see, but it is not something that Royal Mail has admitted.

I am also grateful to the Opposition spokesperson, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). She was exactly right about the important role that Royal Mail has played in the pandemic in delivering PPE and so on, and also—a point I do not think the rest of us made—that postal workers were often the only human contact for people who were shielding. She reminded me that people had hugely appreciated that, because it was often the only conversation they had with anybody during that period.

I am very grateful to the Minister for engaging with the issue seriously and for understanding the distress that it is causing and for providing the data that he did. He is right to say that Royal Mail did some Sunday services—it shocked constituents to get post on a Sunday—so it was trying. The Minister provided important delivery round data as well.

One of his most important points was that fewer people are relying on the service, but for those that do, it is incredibly important. That is the same debate as for the use of cheques or the use of cash, or people who do not have smartphones. We forget sometimes—we think there is this relentless progress of technology, but it can leave people very vulnerable. People not receiving the things they should have been has been very difficult for them.

The Minister is quite right to say that tomorrow I am visiting one of the service centres, so I will be able to get under the skin of the issue. Royal Mail has told me that it has hired more staff and bought more vehicles, so the test will be whether it gets better this year. If it does not, I will be back on the Minister’s case and on Royal Mail’s case, because it is important that constituents get the service they are paying for.

Thank you very much, Ms McDonagh, for chairing the debate.

Question put and agreed to.

Resolved,

That this House has considered the performance of Royal Mail.

16:20

Sitting adjourned.