Royal Mail Takeover

Debate between Harriett Baldwin and Justin Madders

Monday 16th December 2024 Commons Chamber

[Dame Harriett Baldwin (West Worcestershire) (Con)]

May I start by thanking the Minister for advance sight of his statement? Before I get into my questions, can we take a moment to thank every postman and postwoman up and down this country for their hard work, particularly at this time of year? In all the challenging weather, they are out there putting letters through every letterbox in the land and collecting thousands of letters from the red pillar boxes in every corner of our country. I take the opportunity, especially in this Christmas season, to say thank you on behalf of all of us.

Every colleague here will recognise the importance of Royal Mail, both as an institution and as a provider of a vital nationwide service. It has been in existence for more than 500 years, and it has seen a lot of change over those years, but the one consistent thing is that it is still a service on which we all depend every day. It is not the only way we communicate any more, but it is a vital one, and it will continue to be needed, including by Government. What a shame it is that one of the biggest postal deliveries done by Royal Mail this year was from the Government. It was a letter to many pensioners—often on low incomes—cancelling their winter fuel payments.

The dwindling number of letters sent has eroded the base on which the success of Royal Mail was built. The inevitable consequence is that Royal Mail has been facing serious financial challenges, and amid those challenges the service received by people across Britain has become worse, whether that is deliveries missing their deadlines, letters going missing or occasionally, in some areas, people going weeks at a time without post. The example of that failure was shown last week by the fines that Royal Mail received. The cost of this poor service cannot be overstated, whether it is for those who subscribe for services by mail, those who rely on business deliveries or those who miss appointments with their general practitioner, impacting their health and costing the Government. That poor service cannot be allowed to continue.

The inward investment into the service announced today will be scrutinised by shareholders, but given that they are the golden shareholder, I have questions for the Government. What guarantees has the Minister received about the service provision? What commitments has he received about the level of jobs across Royal Mail? How much of Royal Mail do the employees themselves now own? In some places it has been reported that the commitment to the tax residency guarantee is for five years, but I heard the Minister say at the Dispatch Box that it was perpetual. Can he clarify that?

What ongoing role will the Government have in making sure that Ofcom ensures that Royal Mail delivers the service expected by customers? The fines do not seem to be doing it. An important part of the service offered by Royal Mail is the universal service obligation, which now requires post to be delivered six days a week and parcels to be delivered five days a week. When the Royal Mail is working well, the universal service obligation provides an outstanding service. However, Royal Mail wishes for it to be reformed. Does the Minister believe that the obligation must be maintained in its current form? Can he confirm what discussions he has held with EP Group about the obligation? Will he confirm whether there is a sunset on the obligation? He mentioned that there potentially was with a transfer of ownership.

The value of Royal Mail goes far beyond the universal service obligation. Can the Minister outline whether he expects any of the other services provided by Royal Mail to be impacted? For example, can my rural constituents continue to count on their letters being collected from every post box? What risks has he identified with the takeover itself? Although the Post Office and Royal Mail are separate entities, they are closely tied. Just over a month ago, the Government announced that more than 100 post office branches were at risk of closure, with hundreds of jobs lost. Can the Minister explain what assessment he has made of the risks facing the Post Office and how they will be impacted by the sale of Royal Mail?

Royal Mail faces the same headwinds, often created by this Government, as other businesses. Whether it is Labour’s employment regulations or the national insurance jobs tax, businesses have warned that they may be forced to put up prices and cut jobs, because of the very actions of this Government. Finally, can the Minister confirm whether Royal Mail has expressed concerns over the Budget or the Employment Rights Bill?

[Justin Madders]

I thank the shadow Minister for her comments, and I start by joining her in thanking all those postal workers who throughout the year—not just at this time of year, when it is particular busy, but 12 months a year—come rain or shine, sleet or snow, deliver those much-needed communications from friends, family and loved ones. I was pleased to be able to go to my own depot in Ellesmere Port last Friday. I will go to another one in my constituency, in New Ferry, this Friday. All hon. Members should be encouraged to make those visits, because they really show how much we appreciate the work that our postmen and women do.

The hon. Lady is right that the Royal Mail is a service that we all depend on. I agree that performance has not been good enough in recent years. That is why we have had a number of discussions with the company and with Ofcom about how we will get things back on track. That is why the agreement is so important, because the deal will get in the investment needed to try to drive up that performance.

I turn to some of the hon. Lady’s specific questions. On guarantees of service provision, the legislative framework is already there for the universal service obligation, and I see the takeover having no impact on that. It has not been part of the discussions—it is an entirely separate issue—but Parliament will have its say on that if needed. Next year, Ofcom will have a consultation on the universal service obligation. I think it is recognised that an awful lot of work is needed to bring standards up to the level that we would like, and one of the protections in the agreement will hopefully deliver on that.

On jobs guarantees, the hon. Lady will be aware that the general secretary of the Communication Workers Union has spoken positively about the agreement reached. He believes that sufficient assurances have been given on jobs. On employee engagement, she asked whether the employees will own the company. That is not the case, but they will have a say in governance in future as a result of an agreement between the Communication Workers Union and EP Group. That is to be ratified by the Communication Workers Union executive, but that will be a groundbreaking arrangement that we did not have previously. She also asked about tax residency in perpetuity, which is what the golden share does indeed intend to deliver.