Bob Russell
Main Page: Bob Russell (Liberal Democrat - Colchester)Postal Services Bill
Bob Russell Excerpts(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Bob Russell (Colchester) (LD)
I beg to move, That the clause be read a Second time.
When social historians come to study the Post Office/Royal Mail between 1980 and 2010, they will wonder how a great British institution, which was exported around the world and was copied by other nations, was allowed to go downhill so quickly. Successive Governments during those 30 years have to share equal blame. The number of post office closures was considerably greater under the Labour Government than in the years of the previous Conservative Government. In my constituency—I am sure that this was repeated around the country—the number of sub-post offices was almost halved under Labour Government policies that were both deliberate and had unintended consequences. For example, no joined-up government was involved when that Government’s Department for Work and Pensions put the delivery of Government mail out to the private sector. What makes the situation even worse is that the final journey of every privatised letter and package delivered in this country makes the Post Office/Royal Mail a loss; every private package and private letter is subsidised by the public purse.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Does my hon. Friend know that when I went to meet postmen, as I always do at Christmas, I found that what bothered them more than anything about the Bill was not so much the privatisation element—although they did not particularly welcome that—but that they were walking up drives, delivering letters at a loss? That suggests that the kind of inter-business agreement that led to that regulatory requirement showed a serious deficiency in Post Office management.
Bob Russell
I endorse that. I, too, like many right hon. and hon. Members, visited my local sorting office. It is safe to say, without any contradiction, that morale is not high.
Mr Mike Weir (Angus) (SNP)
I have listened carefully to what the hon. Gentleman has said. The inter-business agreement is an agreement between post offices and Royal Mail about the use of post office services. I think the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) was referring to the headroom agreement, which relates to the “last mile”. That is a different thing and is not related to the agreement between the two arms of Post Office Ltd.
Bob Russell
The hon. Gentleman has taken a keen interest in this Bill and will know the ins and outs of it far better than I do. I am making the general point that the incompetence of the last Government and of Royal Mail and the Post Office under the jurisdiction of the last Government mean that every time a private package is delivered by the friendly postie, it is at a loss to the public purse. That was my general point. Indeed, I could refer to Postman Pat and his black and white cat. Some hon. Members might have seen the adaptation of Postman Pat by Specsavers, and the agreement that the last Labour Government allowed is like that Specsavers advert—Postman Pat is not on the road, he is driving over the fields and knocking down signposts.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I can understand that the hon. Gentleman is unhappy with what happened under the previous Government, but would he care to elaborate on his anxiety and the role of the regulator in constantly squeezing prices, which led to some of the losses?
Bob Russell
The hon. Gentleman may well be right. I might come on to the point about pressing down prices in the future.
I am not a fan of privatisation, either of Royal Mail and the Post Office or of any other aspect of a public utility. My record is proof of that. I did not agree with the proposals that came out under the Labour Government to privatise or part-privatise Royal Mail and the Post Office. Although my heart is against the Bill, my head tells me that it will happen. We must be pragmatic and we must accept the inevitable. I am still hoping that a mutualised company will emerge, as many of our sub-post offices are already run by mutuals through the co-operative movement. That is one way. Another way would be if shares were issued to the work force.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
On the issue of downstream access that my hon. Friend has been addressing, one thing that the Bill does is to give the regulation to a regulator with more robust experience of regulating markets. The most important thing that the regulator will have to do is to ensure that the access arrangements are fair and balanced so that Royal Mail can survive to deliver that crucial universal service.
Bob Russell
As ever, my hon. Friend makes an important and valid point. Those who inherit this Bill, when it becomes an Act, will need to take that on board.
I think I am one of the few people in the House who was once employed by the Post Office. I joined the company in 1973, when it was Post Office Telecommunications. It then became British Telecommunications—that was the first significant split—and it was then privatised. The rest is history, as they say. Many people still refer to that great British institution as the General Post Office, even though it must be 40 or 50 years since the GPO ceased to exist—I am not sure exactly when it was—in the same way as they still refer to the boy scouts, even though they have not been boy scouts for decades.
Returning to the point that the hon. Member for Dumfries and Galloway (Mr Brown) made, I am grateful for this trip down memory lane because when the previous Postal Services Bill came before the House, the shadow Chancellor was the responsible Minister and he had some harsh words to say about the previous Administration. He said:
“If I was being kind, I would call their stewardship maladroit. If I was being unkind, I would say that Postman Pat’s black and white cat would have provided better stewardship of the Post Office over the term of the previous Government.”—[Official Report, 15 February 2000; Vol. 344, c. 868.]
It is fair to say that we are now back to the modern Postman Pat and the Specsavers advert.
There are 11,905 post offices in the UK, the vast majority of which are sub-post offices run as franchises by sub-postmasters.
Jim Shannon (Strangford) (DUP)
Does the hon. Gentleman agree that a 10-year agreement would be a better system for securing the future of the Post Office, especially given that the future of perhaps as many as 1,500 post offices across the United Kingdom might be in question?
Bob Russell
I am grateful for that intervention because the thrust and purpose of my new clause is exactly to enable the new, privatised Royal Mail to ensure that business continues to go to the Post Office and our sub-post offices. There is a general perception of the Post Office and Royal Mail as being one organisation, and I acknowledge that I regard it in that way. I know that they operate as two separate business entities, but just as when British Telecom moved away from the Post Office, it takes time for people to come to terms with the fact that they are two different animals.
Mr Weir
Is that not the crux of the problem? The Post Office does a lot more than simply service the mail delivery system, and by privatising Royal Mail the Government are breaking that link. A Royal Mail focused primarily or solely on mail delivery will not need the other services offered by post offices.
Bob Russell
The hon. Gentleman makes my point for me, so I hope that if we go to a vote he and his colleagues will join me in the Aye Lobby.
We have the network and the operating company, Post Office Ltd, and post offices provide a vital service to communities around the UK, especially, but not only, in rural areas. As I have said, about 10 neighbourhood, suburban community post offices have already shut in my urban constituency.
Mr Mike Hancock (Portsmouth South) (LD)
Unlike my hon. Friend, I am not an enthusiastic supporter of the legislation. What will his position be if his new clause is not passed, because he is saying that the Bill will be effective in protecting the things he is interested in only if his new clause is carried?
Bob Russell
I am bound to say that that was not a very helpful intervention from my hon. Friend, particularly as I share a flat with him. At the very least, he could have raised those concerns over the breakfast table.
I think I have made it clear that I am not a fan of the privatisation. I accept the reality of what is going to happen and I am suggesting to the Minister what I think would be in the best interest of our communities. I think that I am making an overwhelming case and it would be great if he accepted my new clause. The previous Government brought in measures on sustainable communities and we are now talking about localism, which is right. To say that the previous Government decimated the system would be wrong: they did more than that because decimation is only 10% and I would have settled for 10%.
Mr Brian Binley (Northampton South) (Con)
Would not this measure make the whole transfer or sale deal much more viable and do much more to guarantee the viable retention of a post office network? If it is not accepted, that will all be in danger.
Bob Russell
I am grateful to my hon. Friend for that extremely helpful intervention. Regardless of what we think of the Bill, we all want to retain as many of our sub-post offices as we can.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
Does the hon. Gentleman agree that, for post offices to be sustained, they need regular work? Is he concerned by what postmasters have pointed out—that there has not yet been a guarantee of additional work from the Government? Indeed, post offices might not even win some of the contracts that they have already bid for.
Bob Russell
The hon. Lady is correct and it is a pity that she was not here during the terms of previous Labour Governments to argue that case because they withdrew business from our sub-post offices. That is all on the record and there is no point in anyone seeking to deny it. The deliberate policies of the Labour Government are one reason why so many post offices have shut.
Tony Lloyd (Manchester Central) (Lab)
The hon. Gentleman is being very generous in giving way. He began to touch on the importance of the post office network in urban as well as rural areas, but was not able to develop the point. I represent a very urban, inner-city area and the post office network is vital to keeping the business community together. Quite simply, other businesses depend on post offices, which are coming under intense pressure from the supermarkets, for example, so we need to build in protection for the urban as well as the rural areas.
Bob Russell
I am also grateful for that intervention; every intervention so far, with the possible exception of that by my hon. Friend the Member for Portsmouth South (Mr Hancock), has been helpful to my argument. I referred to the rural post offices and I mentioned urban post offices following a series of interventions. The intervention of the hon. Member for Manchester Central (Tony Lloyd) bears that point out. The difference between rural and urban sub-post offices is that at least in urban areas there is a sporting chance that there might be one two miles or so away, whereas in rural areas one might have to add a zero to that distance.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I do not challenge the hon. Gentleman’s recording of history in that certain Government Departments that tendered their postal arrangements went outside Royal Mail. That is a matter of fact, as he says, but in defence of Labour’s record, my right hon. Friend the Member for Edinburgh South West (Mr Darling) secured £1.7 billion to try to keep the network as large as possible. Has the hon. Gentleman made any estimate of how many post offices and sub-post offices his right hon. and hon. Friends will close if his new clause is unsuccessful?
Bob Russell
No, I have not, but I am sure that the Minister, whom I have not yet won over to my argument, will point out that the coalition Government are investing a substantial sum of money in the sub-post office network. That will happen irrespective of what happens to my new clause.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
May I help the hon. Gentleman? Over the weekend, Consumer Focus said that unless there is any progress on this agreement, up to 4,000 post offices could be closed. Does he agree with that assessment?
Bob Russell
I am not in a position to challenge research that other organisations have undertaken. If that is the case, based on the number of closures under the previous Government, I would probably lose at least a third of the remaining sub-post offices in my constituency, which I would not welcome. Indeed, I would be distraught if that happened as a result of the Bill, but I hope that the money that the coalition Government are placing into the network will mean that the losses will not be of that magnitude.
Mr Russell Brown
The hon. Gentleman mentioned the amount of Government work that was taken away from post offices by the Labour Government. For the record, would he care to list what Government work was actually taken away? Not just the House, but the wider public would then be able to understand exactly what that means.
Bob Russell
The hon. Gentleman tempts me to rush to the Library to see whether that information would fill one or two sides of A4. We are not talking about one or two things; otherwise sub-postmasters would not have been telling me over the years that they lost business because of the actions of the previous Government—for example, on TV licences.
Mr Brown
I am sure the hon. Gentleman recognises that TV Licensing is not controlled by Government. The authority made a decision to save £100 million, so I have to say to the hon. Gentleman in good faith that it is wrong to make that statement, because TV Licensing is not Government-controlled.
Bob Russell
I am not sure whether I am grateful for that intervention, but if the hon. Gentleman is saying that the previous Government were impotent, I accept his observation.
Richard Fuller (Bedford) (Con)
The hon. Gentleman has been so gracious in giving way that I need to go back about four interventions to what he was saying about what the current Government are doing, rather than going into the history. When he acknowledges that the coalition Government have put substantial amounts of money into defending the post office network, does he accept that there really is a commitment behind the Bill to maintain the viability of the post office network, and there must be good reasons why his proposal is not permissible? Would he care to comment on the implications at European Union level?
Bob Russell
I suggest that the hon. Gentleman discuss that last point with the hon. Member for Stone (Mr Cash), who can enlighten him far better than I can. I thank him for the intervention, but the short answer is that I do not know what impact my new clause would have on EU legislation. I am sure that if there would be an impact we will hear about it from one of the Front-Bench speakers at some point.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
If the hon. Gentleman looks at the record, he will see that the amount spent by the previous Government in paying out for closures of post offices—in other words, to people who left their post offices and took the King’s shilling—came to much more than the sum proposed by the current Government over a four-year period. How much impact does the hon. Gentleman think there will be on post offices from losing the arrangement to do business for Royal Mail, in terms of closures, compared with the paltry sum that is being offered? It may in fact be spent on redundancies and closing post offices, as it has been in the past.
Bob Russell
I need to move on, as my hon. Friend the Member for Bedford (Richard Fuller) suggested. However, in view of that intervention, I must respond by pointing out that the money the previous Government put in was to pay for closures, whereas the money this Government plan to put in will be to keep sub-post offices open. There is a significant difference between the two.
Bob Russell
No.
As the interventions have indicated, the post office network is still fragile. Some 9,000 sub-post offices have closed over the past 20 years. I am advised that 900 are for sale at the moment and that more than 150 are designated as “long-term temporarily closed”. That is not a phrase I understand, because I am not sure in which order the words should go.
The sub-postmasters who run those businesses have retired, are about to retire or want to sell their business because it makes no money. That is an important point, because in calculating the number of post offices that are open, Post Office Ltd includes those that are euphemistically described as “temporarily closed”. It is clear that many post offices find it hard to survive and sustain business. I am pleased that the Business Secretary recognises the difficulties that face the network. His announcement of a £1.3 billion subsidy will bring much comfort and will help the network to continue to operate for the next four years.
All of us want post offices to operate without subsidy. It is certainly unique that a high street retailer should be financed by the taxpayer; no other retail outlet would be allowed such support and nor would any Government want to provide it. The subsidy to the post office network reflects the unique nature of the business and the services post offices offer. When the social historians look back, they will acknowledge that just as the telegram has gone, so modern technology means that the business has to adapt. What should have happened in 1997 was a recognition of the potential use of modern technology through that wonderful network of outlets across the country—in towns, cities and villages. The Government should have asked what else that unique network could provide. They did not, and the result was that business continued to go down, which is why we are in the mess we are in now.
The relationship between Royal Mail and Post Office Ltd is governed by the inter-business agreement, or IBA, which sets out in detail the commercial relationship between the two companies. Typically it will include the goods and services that Royal Mail offers exclusively—or not—through the post office network. The IBA is essential to those post offices, as well as their commercial retail activity. I had the privilege of opening a fish and chip shop in a post office so that the owner could, it was hoped, keep the post office going. I believe it was the only fish and chip shop post office in the country. Sadly the post office has gone, but the Myland chippy is still there.
Royal Mail provides the post office business with a significant proportion of its income through transactions in respect of the postage of letters, packets and parcels. As we all know, historically, the combined businesses were known as the General Post Office—the GPO for those of us of a certain age—and then the Post Office. Integrated businesses operated together to handle mail and provide post office services. Over time, the businesses have become increasingly separate and the Bill breaks the company link between Royal Mail and Post Office Ltd entirely—exactly as British Telecom broke away from the Post Office.
There was a time when working for the post office was a family thing; it was generational. There was pride and security of employment, but now, as we have already heard, morale is on the floor. My new clause seeks to ensure that before the sale of Royal Mail, the two businesses have a copper-bottomed inter-business agreement in place and that it stays in place unmolested for 10 years.
Ministers may ask why it is necessary for such an agreement to be in the Bill. No doubt, they will point to the current IBA and, of course, the subsidy the Government, or rather taxpayers, are generously providing. They will point to evidence given in Committee by Royal Mail that it has no intention of breaking its commercial relationship with Post Office Ltd. There should thus be no problem with the new clause, because it will put in writing what the Committee was assured would be the case.
Jim McGovern (Dundee West) (Lab)
May I ask the hon. Gentleman about the 10-year period? Why not one year, or an indefinite period? How did he arrive at 10 years?
Bob Russell
That is a good question. The number could be nine or 11. Those with whom I have discussed this point—including the Communication Workers Union and others—are of the view that the period cannot be open-ended. There is general acknowledgement that the provision cannot last for ever. The number of years could be five, eight or 10—it is just a figure. I do not think it was scientifically arrived at—if that is what the hon. Gentleman is asking; it was really a question of trying to cement an existing operational mechanism on a formal legal footing for at least 10 years, in the hope that it would continue way beyond that. It would be a guarantee for 10 years, but the hope is that it would continue.
Mr Mike Hancock
I will try to be helpful to my hon. Friend. I do not support the Bill, but I support the new clause in trying to bring about a significant improvement. In his discussions with the Government, have they given him any explanation of why they would want to resist such a straightforward and sensible measure as the one he proposes?
Bob Russell
If my hon. Friend thinks that I have been spending hours and hours trawling around meeting Ministers—
Bob Russell
I was up early—true—but the new clause stands in my name, and I am sure that the Minister is aware of my thinking. I have not persuaded him so far, although I have been speaking for half an hour. I hoped that he might intervene to say that he accepts the argument and my new clause. Until such time as he does, I will keep going and hope I can win him over.
Mr Weir
I thank the hon. Gentleman for giving way; he has been very generous with interventions. He mentioned what the Minister said in Committee, but I can assure him that many of us who served on the Committee were not convinced by the Minister’s argument. It seems to me and to many others that the fundamental difference is that Royal Mail and Post Office Ltd are part of the same group and will obviously stick together, but when Royal Mail is privatised we will have a large Royal Mail company and a relatively small Post Office Ltd negotiating an agreement. Does the hon. Gentleman think that Post Office Ltd will come out well from such an agreement?
Bob Russell
I cannot comment on the body language in Committee because I was not there. I tabled the new clause, which, if passed, will deal with the hon. Gentleman’s fears. It is as simple as that.
The new clause would protect the post office network from the IBA’s possible erosion by a privatised Royal Mail. Ministers might feel differently, but we must ask ourselves why Royal Mail is being privatised. Indeed, successive Governments have argued the same points over the past 30 years.
Damian Collins (Folkestone and Hythe) (Con)
Is the hon. Gentleman concerned that, given the nature of change, a 10-year restriction on the inter-business agreement might end up being bad for the Post Office? Under the Bill, new providers may come in, so it might welcome the flexibility to renegotiate the agreement.
Bob Russell
That is certainly a valid argument, although I do not agree with it. I understand what the hon. Gentleman is saying: 10 years could be too restrictive and a shorter period—or, indeed, no period at all—might be beneficial.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
Is my hon. Friend aware that there are many examples of private sector companies splitting to become separate entities and that, in almost every case, a shareholders’ agreement between them has set the terms until they have been able to operate independently? Is that not precisely what the new clause would do, and is it not simply commercial good practice, which should be commended to the Minister?
Bob Russell
I am extremely grateful to my hon. Friend. If he is called to speak in the debate, I hope he will elaborate on that important and valuable point, of which I was not aware. I am sure he is correct—he would not have said it otherwise—so if it is acceptable for private sector companies to split but still have a legally binding agreement, why cannot we have that in this case? I thank him for making that point.
Royal Mail needs to be free from Government interference. It must become more dynamic—I think that that reinforces my point—and more competitive, as the market for postal services has liberalised. Mr Richard Hooper, who has reported to this Government and the previous Government, has said that Royal Mail’s profit is considerably lower than that of other national postal authorities and a lot lower than that of the private carriers. Of course, one reason for that is the subsidised delivery of private mail. Whether or not that is an accurate assessment, the argument in favour of privatising Royal Mail has at its core the desire for the business to grow and become more profitable. As with all private businesses that operate in strongly competitive markets, Royal Mail will undoubtedly want to use the new commercial freedoms it has been given. Indeed, a dynamic Canadian business woman was appointed as chief executive precisely to ensure that Royal Mail can get the best of starts as a wholly commercial entity.
Jim McGovern
The hon. Gentleman said that the Communication Workers Union supports the 10-year period. I am part of the Select Committee on Scottish Affairs, and when we visited the sorting office in Glasgow the manager told us that he favours privatisation—the very first Royal Mail employee to say so. Is the hon. Gentleman aware that the CWU has made it clear that it is against privatisation? Does he support the CWU’s position?
Bob Russell
I am sorry if the hon. Gentleman is not aware of my views on the Bill. I thought that I had made it quite clear that I do not favour privatisation, but I accept the reality that it will happen, and I am trying to make things as good as I can. Of course I know the CWU’s views. I have met CWU people both nationally and locally, and I have told them, “I do not like it, but it’s going happen—accept the reality.” I do not like lots of things, but we have to accept the reality.
The new clause is designed to try to assist the post office network—our neighbourhood post offices. It is also designed to try to ensure that Post Office workers—the people who deliver our mail—have a sustainable business. That is what it is all about. I have encouraged my local CWU people in Colchester to understand that the concept of mutualisation and employees having shares are positive things—they seem to work for John Lewis, as one model, and for the co-operative movement, as another model—and to embrace, not deny what will happen.
Mr David Anderson (Blaydon) (Lab)
I thank the hon. Gentleman for giving way; he is being very generous. Does he agree that neither the Co-op nor John Lewis had arrangements foisted on them by a Government against the will of the work force and the British people?
Bob Russell
I need to reflect on what the Labour Government, particularly Lord Mandelson, had in mind, and how that may or may not differ from the proposals.
I am critical of the Labour Government, but I am also critical of the Government who preceded them. This is the third time that I am going to say this: for the past 30 years, this great British institution has been run down by successive Governments. It was the envy of the world—it no longer is—and ultimately the blame must rest with Government and, it must be said, the somewhat mediocre management for many of those years.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The problem for Labour Members is that when the Government discuss mutuals or co-operatives, we do not know whether they are proposing a workers’ co-operative or a mutual co-operative. We received some indications in Committee, but we do not know for certain what model they are proposing. As has been said, 97% of post offices are independently owned, and we assume that those owners will go into a mutual model.
Bob Russell
I thank the hon. Gentleman for his intervention, and in so doing I return to the confusion about post offices and Royal Mail. If we get confused in this debate, we can understand why the general public are confused too. He is absolutely right that 97% of sub-post offices are not owned by the Government. We are not talking about them—we are talking about Royal Mail and how privatisation and whatever measures and aspects of the Bill are introduced will assist post offices and Royal Mail and its workers.
Ian Murray (Edinburgh South) (Lab)
The hon. Gentleman has been generous in accepting interventions. You talked in response to my hon. Friend the Member for Blaydon (Mr Anderson) about successive Governments running down Royal Mail, which, to use your words, is a national treasure and national institution. Would you therefore agree that it will be your Government who could put the final nail in the coffin?
Mr Speaker
Order. I have not talked about anything and I am not giving any commitments on anything, but Mr Russell might.
Bob Russell
Thank you, Mr Speaker. Which Government did what when will be in the history books, so the hon. Gentleman will have his moment of glory and can say, “It was the dastardly Conservatives and Liberal Democrats wot done it.” That is how he would wish to present it, but I am not sure how history would record the demise of Royal Mail and the Post Office if Lord Mandelson’s proposals had been introduced, whatever they may have been.
I want to gaze into the future and imagine the agenda of the first board meeting of the newly privatised Royal Mail plc. After a report from the remuneration committee, perhaps the main item of business will be listed as the sponsorship of Sunderland football club. Afterwards, the agenda will no doubt turn to the issue of cost savings to be achieved. Like any other dynamic FTSE 100 company, which Royal Mail, I understand, will become, the board will want to see how it can reduce the cost of its contracts with suppliers. It happens every day in the world of commerce, notwithstanding the helpful contribution from my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso). In that private world, the agreements that I propose in my new clause exist.
A principal supplier to Royal Mail is Post Office Ltd. The board will confer and I have no doubt it will quickly decide two things: first, the cost of the contractual relationship with Post Office Ltd is too expensive and, secondly, limiting the distribution of products and services to the post office network does not work in the best interests of Royal Mail. That is where the analogy with the supermarkets comes in, because the criticism is that they are all-powerful. They determine the contracts with suppliers, they set the price, and if suppliers do not like it, they know what they can do.
Damian Collins
In the scenario that the hon. Gentleman paints, might it not be possible for the Post Office to say to Royal Mail, “Well, if you are going to do this to us, we will look at taking postal services from providers from whom we do not currently accept them, and run them in competition with your service. Would you like us to do that?” It would be an honest negotiation.
Bob Russell
Again, that is a good argument, and the hon. Gentleman may be proved right as time moves on. I hope that that will not be the case, but he makes his point.
Why would it be any different with Royal Mail? It may operate an agreement with Post Office Ltd, but there would be nothing on this earth to stop Royal Mail renegotiating it. In fact, Royal Mail would be obliged to change the terms of the inter-business agreement. It would, under any commercial logic, seek a wider set of outlets for a broader range of its services, including supermarkets, petrol stations and retail outlets. That will take vital revenue away from those post offices that currently have exclusive rights. Royal Mail will seek to chip away at the transactional costs that it pays to Post Office Ltd. It will want to revisit the IBA, renegotiate terms, and demand changes. As they say, it is nothing personal, only business, but every little counts.
What can we do to protect the UK’s network of post offices from the predatory actions of a privatised Royal Mail? If we leave the whole issue to be resolved in the commercial arena, there will be only one winner and one big loser. Even more of our neighbourhood and community post offices, both urban and rural, would go.
Jim McGovern
May I take the hon. Gentleman back to proposals to reduce costs, and what he said about there being one loser? Does he agree that probably the biggest cost to Royal Mail is paying its work force, and that the way to reduce costs is probably to drive down terms and conditions, so the biggest loser of all will be the work force?
Bob Russell
I am sure that the hon. Gentleman is right, which is why the new clause is important, not only for the retention of the sub-post office network but for the interests of employees whose morale, as I have said, is exceptionally low.
The new clause seeks to bring certainty, and ensure that the post office network will not face an immediate onslaught from Royal Mail. It places the IBA in legislation and ensures that it cannot be broken for 10 years. I accept that in order to help the process of privatisation along, Royal Mail managers have pledged undying love for their supplier. However, it could be argued that directors of a dynamic, privatised Royal Mail would be negligent in their duties if they did not try to cut the cost of doing business through Post Office Ltd.
The new clause can absolve them of that responsibility. It would enable all sides to point to the legislation and walk away from having to renegotiate the inter-business agreement. It would manage the expectations of institutional shareholders, who would not be able to exert pressure on Royal Mail to cut those costs. I am sure that my right hon. Friend the Secretary of State for Business, Innovation and Skills will recognise that together we are protecting the post office network. The omission of the inter-business agreement from the Bill can now be rectified.
Michael Connarty
Unfortunately, I have to leave the debate early, because I have to attend the European Scrutiny Committee at 2 o’clock.
First, the new clause attempts to ameliorate the impact on Royal Mail and particularly the post office network of what is probably one of the nastiest things that the Government will ever do to the people of the UK. The terrible act of putting up tuition fees up to £9,000 will damage a number of people, and will probably bring about the demise of the Liberal Democrat party, but the Bill attacks the fundamental structures of society, because it will bring about the closure of a vast number of post offices. Strong arguments were made—and I made them—every time that the previous Government went through another retooling of the post office network at huge cost. The hon. Member for Colchester (Bob Russell) tried to say that Government money set aside for the post office network over the next four years will be somehow be used to keep post offices open. If we look at the amount of money spent by the previous Government paying postmasters and paying for redundancies in the Royal Mail and the post office network when post offices closed in many of the communities that I and all of us represent, it is clear that the money will go in that direction. One reason why it will go in that direction is that the inter-business agreement will not be sustained in a privatised environment.
Michael Connarty
My hon. Friend echoes sentiments that are expressed in every post office and sub-post office when any of us take the trouble to ask.
Bob Russell
Will the hon. Gentleman be gracious enough to acknowledge that over the past 13 years his Government’s policies, inactivity and general performance created the situation that we are in today? If he wishes to move on with his argument for the future, he should have the good grace, please, to acknowledge past failings.
Michael Connarty
I have no problem doing that. I do not know whether the hon. Gentleman has been in the House when I have spoken about the Post Office in the past. I am the organiser and secretary of the communications workers liaison group in this place. I have opposed every attempt by any Government to bring in schemes to downsize the post office network—every single one of them.
My Government was criticised by me and by the Communication Workers Union. That Government put in a director, Crozier, who walked off with millions of pounds in bonuses for sacking people—for downsizing the number of people at the sharp end and failing entirely to do the one thing that he was tasked to do, which was to bring in the technology to modernise the process of distribution and introduce letter-bundling by street, as is done in any sensible country. He failed and was paid millions of pounds. That sounds like what happened with the banks so it seems as though we did a lot of that under the previous Government.
I am happy to say that the Labour Government got it wrong, because they did get it wrong. I say to the hon. Member for Colchester (Bob Russell) that his party will be judged on how it acts in government, not on how he is acting from the liberal wing of the Liberal Democrats. The orange book Liberals have joined the Tories and will become Tories if they want to stand at the next election. They are sitting opposite me at this moment. They are the people who are destroying the post office network, just as the delusional people in my party cost us millions of votes by doing what is about to be carried to its final conclusion—that is, attacking the structure of our communities.
When a Crown office goes and a sub-post office is put into a sweet shop at the end of the high street, we see the change. We see people queuing outside in the rain because the shop is too small to handle the business. When a sub-post office is put into the back of a small supermarket, as one has in Bathgate, or into a sweet shop, as one has in Linlithgow in my constituency, people in wheelchairs cannot get into the post office when staff create a barrier as they stock the shelves with quick-sale goods. All that happened under our Government, and the measures proposed in the Bill will be worse than any of that.
Bob Russell
The right hon. Member for Rotherham (Mr MacShane) was a former Minister and had 13 years in which he could have promoted the people’s bank proposals. It is up to Parliament to suggest clauses. The hon. Member for Edinburgh South (Ian Murray) could have tabled a new clause on a people’s bank for this legislation. Surely the right time to establish the people’s bank in legislation was when his Government bailed out the banks with billions of pounds of public money, when it could have been imposed on the network of post offices that was left after the huge closure programme?
Ian Murray
I am delighted by the hon. Gentleman’s intervention, but I repeat the point that I made in my intervention on him: he has criticised previous Governments going back 20 or 30 years for running down Royal Mail and the post office network, but it will be his Government who put the final nail in the coffin.
Mr Davey
I think I should definitely be advised to share neither those private conversations nor the legal advice that may or may not have been given to Moya Greene and that she may or may not have shared with me.
The wider policies of the Government for the post office network will prevent major closure programmes. We have heard no apology today for all the closures of post offices under the previous Government. We saw 7,000 post offices close under the Labour Government. This Government have policies to make sure that that will not happen again, and I urge my hon. Friend the Member for Colchester to withdraw the new clause.
Bob Russell
When we read Hansard tomorrow, we shall see that there was at least one commitment—if not more—in the Minister’s response. Whatever the outcome of the vote, the fact that we have held the debate is worth while.
To be told four hours into the debate that my new clause may not be lawful was a little strong. I am pretty sure that, if the proposal were not lawful, somebody, somewhere, would have drawn it to my attention, if not when I tabled it, certainly in the few weeks since the Christmas and new year period. When I am told that there could be a serious legal challenge, all I can say is that nobody has challenged me as to the legality or otherwise of new clause 2.
Although I am grateful for all the contributions to the debate, I am disappointed. Had this been a boxing tournament, the ref would have ended the bout at least two hours ago. If this were an Oxford Union debate, the vote in favour of new clause 2 would have been overwhelming, because the case against the new clause is not very strong. It may be that all the Members who oppose new clause 2 are not present, and only the minority who support it have come to the Chamber to speak, but I am grateful to Members on both sides of the House. I think that we all agree that our sub-post office network is a vital part of our communities. Whether it is sustainable communities or localism, all Governments come up with such ideas and then promptly do things that do not appear to be community oriented.
It is on record that I am opposed to the privatisation of Royal Mail, but I accept that it will happen, so this is a question of what is best. I genuinely feel that new clause 2 is a way of taking things forward.
It is less than nine months since the utopian era of 13 years of new Labour came to an end; of course, it was a golden era for Royal Mail and the Post Office, so although I welcome the support that has been given we need to put it in historical context. The closures under the previous Government were the greatest of any time in the history of the Post Office and Royal Mail. I believe that the coalition Government have proposals—
Nia Griffith
The hon. Gentleman needs to remember that when we debated how to support the post office network and how to put in the extra subsidy that enabled us to keep open 11,900 post offices, the Minister of State, Department for International Development, who was then the shadow Minister speaking for the official Opposition, made it absolutely clear that the Conservative party would not have put in the amount of money that we were prepared to put in. Of course, the Liberal Democrats were not then promising anything because they never thought that they would have to deliver.
Bob Russell
I provided the hon. Lady with an opportunity to apologise for Labour’s mistakes, but an apology was not forthcoming.
I am disappointed that the Minister has not accepted new clause 2. After all, over Christmas, the Government accepted another of my proposals—that a picture of the Queen’s head must remain on stamps—although if we reach that amendment later on, it refers only to Her Majesty, and we need to tighten up the wording because the monarch may not always be female. I wish to press new clause 2 to a Division.
Question put, That the clause be read a Second time.