Royal Mail

Debate between Lord Hain and Michael Fallon

Thursday 12th September 2013 Commons Chamber

[Michael Fallon]

I am grateful to my hon. Friend, who played a part at an earlier stage of the story. A lot of progress has been made since then in tackling the pension deficit, setting up a proper regulatory framework and separating Royal Mail from the Post Office, but he is right to emphasise the key point: Royal Mail needs commercial freedom to invest in its future. The private post in Germany, Deutsche Post, is spending about £600 million a year in modernising its network and in automating, and Royal Mail needs the freedom to invest similarly.

[Mr Peter Hain (Neath) (Lab)]

What credibility can we attach to the Minister’s promises on the universal service when The Daily Telegraph reported last December that Ministers were pressing for a reduction in the commitment to first-class deliveries being provided universally? Is not that the beginning of a slippery slope that the public fear over privatisation, and why is he not imposing the same obligation on competitors to Royal Mail, such as TNT, to deliver to every house in the land, which Royal Mail has and which is costly to it while competitors cream off the most profitable business?

[Michael Fallon]

This is not a promise or pledge from me that the right hon. Gentleman and his constituents need to rely on; it is a law—an Act of Parliament—that the universal service has to continue to be provided. That law can be changed only by the House. We have absolutely no plans to change it. It is up to the regulator to ensure that competition is proper in that market and that the universal service provision is properly provided by Royal Mail.