Royal Mail: Universal Service Obligation

(Limited Text - Ministerial Extracts only)

Tuesday 4th November 2025 Westminster Hall

[Sir Ashley Fox]

Indeed it should. We have evidence of poor management and, dare I say, occasionally unco-operative unions.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I have found that local post workers are really keen to innovate where they can to try to deal with the issues. One thing they pioneered was putting the NHS barcode on healthcare-related letters. Does the hon. Member agree that the Minister should liaise with his colleagues in the Department of Health and Social Care to make sure that every NHS organisation puts that barcode on so that those letters can get to the people who need them?

[Sir Ashley Fox]

I agree entirely with the right hon. Lady.

I know that there are plenty of local problems, but I also want to look at the national picture. In the first quarter of this financial year, Royal Mail’s performance under the existing USO targets fell well short of expectations. The target for first-class deliveries is 93%, meaning that 93% of first-class post should arrive the next working day. In practice, Royal Mail managed only 75.9%. For second-class deliveries, the target is 98.5% delivered within three working days, yet only 89.3% were delivered on time. That is millions of items delayed across the country. When we look at daily deliveries, the story is even more concerning.

In 2024-25, the proportion of daily routes that were delivered was 87.8%. That is against a target of 99.9%. On any given day, more than one in 10 routes were simply not delivered at all. That explains why locally, even within a small village, some people appear to get a good service while others get next to no post at all. A constituent in Spaxton wrote to me to let me know that his postie had complained of severe staffing shortages and that the new contracts being offered were making the jobs unattractive to new starters.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business and Trade (Blair McDougall)]

It is a pleasure to serve under your chairmanship, Sir Desmond. I congratulate the hon. Member for Bridgwater (Sir Ashley Fox) on securing this important debate on Royal Mail and the USO, an issue that matters deeply to households and to businesses across the country. Royal Mail is an iconic part of the UK’s infrastructure. The postie remains a familiar part of every city, town and village, providing a vital service to communities around the country. As other hon. Members have done, I pay tribute to the dedication of posties. I know, from spending time out on delivery with posties from the Barrhead sorting office in my constituency, the care that they have for their customers, and particularly their vulnerable customers. The USO underpins the network, guaranteeing that letters and parcels can be sent anywhere in the UK at a uniform price, six days a week. That principle ensures that businesses can reach customers nationwide and that families can stay connected.

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

I represent a partly rural constituency, Morecambe and Lunesdale, so my constituents rely on the universal service obligation. They also rely on regular mail deliveries for vital information such as hospital appointments. But my constituents, particularly in villages like Endmoor, are suffering with irregular and delayed deliveries. Does the Minister agree that my rural constituents deserve a good postal service, and that Royal Mail should focus on delivering one? What steps is the Minister taking to secure that service?

[Blair McDougall]

My hon. Friend makes an essential point about the importance of the postal service in rural areas. The hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) made that point as well. I know from my relatives in highland areas how essential that connection is. My hon. Friend raises the issue of NHS appointment letters—that point was also raised by my right hon. Friend the Member for Oxford East (Anneliese Dodds) and the hon. Member for Bridgwater. The trials of barcodes on those letters have been very successful, and I am happy to continue discussions with the Health Secretary to make sure that those barcodes are rolled out as widely as possible.

[Patricia Ferguson (Glasgow West) (Lab)]

I am grateful to my right hon. Friend the Member for Oxford East (Anneliese Dodds) for raising the issue of the barcodes. Royal Mail representatives came before the Scottish Affairs Committee when we wanted to discuss with them the problem of deliveries in rural and highland areas. They were particularly proud to talk about the barcode idea, but seemed to be concerned that perhaps in Scotland there was not the same alacrity in adopting that sensible suggestion. Given the Minister’s knowledge of the geography of Scotland, which is at least as good as mine, is that a point he might want to take up with colleagues in the Scottish Government?

[Blair McDougall]

I certainly will. As I mentioned a moment ago, the more dispersed geography of Scotland means that the postal service is often even more of a lifeline in our part of the world. I will certainly follow up that point with Scottish Ministers, and with colleagues in the Department of Health and Social Care. On the future of the universal postal service, I reassure the hon. Member for Bridgwater that we remain committed to a comprehensive USO that is financially sustainable and efficient, and that meets user needs within the open and competitive market. That is why the six-days-a-week, one-price-goes-anywhere universal service remains at the heart of the regulatory regime that is overseen by Ofcom, but of course the universal postal service faces challenges, as many Members have said.

[Alex Mayer (Dunstable and Leighton Buzzard) (Lab)]

It is also important to get letters into the postal service in the first place. In Bidwell West, which is in my constituency, residents face a 30-minute walk to the nearest post box. That is because Royal Mail refuses to put in new post boxes on unadopted roads, despite the fact that the developer is perfectly happy for there to be a new post box. Would the Minister consider raising that with Royal Mail?

[Blair McDougall]

I can certainly do that. Through Ofcom, Royal Mail has obligations in terms of the accessibility of post boxes, and I will raise my hon. Friend’s point with the chief executive of Royal Mail when I meet with him next week.

The challenges faced by Royal Mail are shared in most European countries, which are taking steps to reform their USOs. On 10 July, Ofcom announced reforms to put the USO on a more sustainable footing, and to push Royal Mail to improve reliability. However, changing those obligations alone will not be enough to guarantee a better service, so today, Ofcom has launched a call for input as part of its ongoing review of affordability, which will inform its consultation early next year. Reform of the USO is an ongoing process, which is being undertaken by Ofcom, the independent regulator, so I will not directly insert myself into that. However, I will certainly make sure that the voices of hon. Members are heard, widely and clearly.

Many Members raised issues relating to the quality of service. Experiencing delays is so frustrating, as many Members said. That is why, when EP took over Royal Mail, we secured the commitment through our golden share that before its new owners take value out of Royal Mail, quality of service must improve. Ofcom has powers to investigate and take enforcement action when failures in quality of service are identified, as it did recently when it fined Royal Mail £21 million for contravening its service conditions in 2024-25. Ofcom has told Royal Mail that it must urgently publish a credible plan that delivers significant and continuous improvement.

The changes to the USO that I referenced earlier include changes to Royal Mail’s quality of service targets, as the hon. Member for Bridgwater mentioned. They are intended to enable the business to more predictably deliver mail without delays, but I share his view that flexibility must ensure reliability, rather than lowering ambitions. Ofcom has committed to closely monitoring Royal Mail’s performance, and to ensuring that it meets the business regularly to have those conversations. It is evident from the contributions of hon. Members across the Chamber that Royal Mail’s quality of service has not been good enough. The Government have discussed that with the chief executive of Royal Mail, and I will do so again on behalf of the hon. Members who have raised issues today.

I will return briefly to the subject of the constituency of the hon. Member for Bridgwater. I know that there have been service issues because of resourcing difficulties in the Bridgwater, Burnham-on-Sea and Taunton delivery offices. I understand that Royal Mail is now actively recruiting staff to deal with that. Again, I will discuss that with the chief executive of Royal Mail next week. Royal Mail has publicly committed to delivering improvements to its quality of service, and is taking action to recruit additional frontline staff, improving delivery office efficiency and simplifying the network to make it more reliable and resilient. I am encouraged to see that Royal Mail is recruiting 20,000 temporary workers across the country to help deliver the Christmas items that we all expect during that peak period.

As I have set out, the Government remain committed to ensuring the provision of a financially sustainable and efficient universal postal service, one that is accessible and affordable for customers, and that works for workers and businesses. I fully recognise that delays in postal deliveries can have serious consequences for those, including small businesses, who rely on the post for important information. Now that Ofcom has made changes to the USO specification to ensure a modernised service, we need Royal Mail to work with its workforce and unions to deliver the service that we expect.

I hope that hon. Members will see Royal Mail’s service quality improve in the months and years ahead, but rest assured, I will continue to work with Royal Mail and Ofcom to make sure that that is the case. I emphasise that whatever criticisms we might have of Royal Mail, and whatever concerns we might have about the quality of service, we, across the House, are so grateful for the quality of service and the commitment of individual posties, who are an absolute lifeline to communities up and down the country.

Question put and agreed to.