Royal Mail

Lord Bates Excerpts

Wednesday 10th July 2013 Lords Chamber

[Viscount Younger of Leckie]

In answer to the right reverend Prelate, through the Postal Services Act, Ofcom has the primary duty of securing the provision of a universal service. I can confirm that this will be secure in the hands of the privatised Royal Mail. What is protected is not only the six-days-a-week letter service to every address in the UK and free services to the blind, which I mentioned earlier, but also affordable prices, which are monitored by Ofcom. On the specific question, Royal Mail stamp prices for the universal postal service will continue to be regulated by Ofcom, which has a duty to ensure that they remain affordable. For example, Ofcom has put in place a safeguard cap on second-class letters and parcels to ensure that the service remains affordable for all users. I hope that that reassures the right reverend Prelate.

[Lord Bates]

I am grateful to my noble friend for the Statement, which I very much welcome. Has he had an opportunity to read Richard Hooper’s report, which was commissioned by the previous Government and paves the way for today’s announcement? It identified some major hurdles to Royal Mail achieving its competitive position: the elimination of restrictive labour practices; increased levels of automation; and a culture change towards customers. Will he advise us on what progress has been made towards that? Will he also reflect on the point made by IMRG that parcel deliveries are going to increase by 70% over the next four years due to the growth in online sales, providing a real opportunity for a revitalised Royal Mail in the private sector, if it can sort out those inherent problems?

[Viscount Younger of Leckie]

My noble friend’s questions allow me to say that there is tremendous market opportunity for Royal Mail when it is privatised. On the automation programme and the changes that the chief executive has brought about with the rest of the board of Royal Mail, there is extremely good progress to report. I am glad that my noble friend has endorsed that. As to the market itself, we know that there is a tremendous opportunity in terms of future online shopping opportunities, but it will be up to the Royal Mail board following privatisation to use the flexibility of private capital to look at the market and to take even greater advantage of the opportunities for the company.