Postal Services (Scotland)

Cathy Jamieson Excerpts

Monday 11th October 2010 Commons Chamber

[Gregg McClymont]

My hon. Friend raises a very good point, and I am sure that the Minister will wish to address it.

An under-specified universal service obligation and an inadequate subsidy, where that is necessary, mean that there will not be a good postal service. That is currently the situation in telecoms in respect of the provision of fibre-optic broadband to rural areas. A universal service obligation is contained in the Royal Mail Group licence. The number of letter and parcel deliveries is laid down in statute and in the Royal Mail Group licence. However—this is crucial—the rules regarding the number of post offices are much less tightly drawn. There is very little in statute and a limited number of criteria in the licence that Royal Mail is obliged to fulfil.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Does my hon. Friend agree that far from considering cutting the number of post offices, we should be looking to ensure that every community has access to the post office service? Can he, or the Minister, say what plans there are to ensure that every community has that access, particularly communities where new housing developments and so on are being generated?

[Gregg McClymont]

My hon. Friend raises a very good point.

There is very little in statute and a limited number of criteria in the licence that Royal Mail is obliged to fulfil in terms of post office outlet numbers. That did not matter in the past because outside the formal rules the Government, as owner, could and did order Post Office Ltd to maintain the current number of post offices. However, it will matter in future. The statutory or licence conditions, if any, imposed on Royal Mail will determine the future of up to 4,000 of the existing 11,500 post offices.

--- Later in debate ---

[Mr Davey]

Over the next few weeks and months the hon. Gentleman will hear a huge amount about our proposals to ensure that we can make good on our pledge not to repeat Labour’s mass closure programme. I have already mentioned the extra revenues—whether from Government services or financial services—that will form a critical part of delivering on that. Frankly, it is not through regulation that we will save the post office network; it is by getting business through the network so that sub-postmasters can have a decent income and post offices can be financially viable. That is the way to do it.

[Cathy Jamieson]

Given that the Minister believes that a number of the previous post office closures were wrong, what provision will he make for the communities that wish their post offices to be reopened?

[Mr Davey]

As the hon. Lady will see in the weeks ahead, we want to empower communities and to ensure that the post office network is financially viable for the long term. She will have to wait until she hears this Government’s full policy statement, but I hope that she will support it. We saw 5,000 post offices close across the UK under the previous Government, and we will not see a repeat of that. Those closures left my constituents—and, no doubt, those of the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East—far worse off than they were before.

I should like to continue, as I want to deal with an issue that the hon. Gentleman spent some time on. This Government have made a clear choice. We will take action to safeguard Royal Mail and its universal service—the six-day, one-price-goes-anywhere service that is so essential to consumers, small businesses and rural communities. I recognise the hon. Gentleman’s particular interest in this matter, as that service is highly valued in Scotland, as it is in other extensive rural and remote areas of the UK. He was right to make that point.

Protecting the universal service is our primary objective. That means giving Royal Mail the access to the private sector capital and disciplines that it needs to modernise, innovate and thrive in the modern communications market; it means putting in place a regulatory regime that recognises that post is now competing in a wider communications market; it means giving the regulator an increased focus on safeguarding the universal service, regardless of who owns Royal Mail; and it means making sure that postmen and women have a real stake in the future success of the company. That is why we will be introducing the largest employee share scheme in a privatisation for 25 years—bigger than that of British Gas, BT or British Airways. Indeed, as a percentage of the shares, it will be the largest employee share scheme of any major privatisation. I firmly believe that our proposals for an employee share scheme will help to increase engagement and productivity, and will align the long-term interests of the company with those of its employees.

Let me return to the hon. Gentleman’s specific concern. Some have said that privatisation will lead to a degraded service, but they are wrong. The forthcoming postal services Bill will be all about protecting the universal postal service by establishing new, stronger safeguards and a firmer focus on its continued provision.

I do not know whether the hon. Gentleman is aware that our obligation under EU law is to a lesser service than the one that we currently enjoy in the UK. When it comes to the universal postal service and the minimum service that member states are required to provide, the European postal directive specifies only five days per week, with no obligation to keep the service uniform throughout the UK. I am sure that, as one who comes from Scotland, the hon. Gentleman agrees that a non-uniform service would be unacceptable here in the UK. However, the power to downgrade our service to that level already exists, and could be used by a future Government without a parliamentary vote or any need for consultation. That is completely unacceptable to me.

As I said earlier, I intend to establish new, stronger safeguards for the universal service. The Government have no intention of downgrading the service, and will never allow a situation in which the service required in one area of the country is not the same as that required in another. I hope that the hon. Gentleman will support the safeguards in the Bill when they are debated in the House, because they relate to the very points that he has made so eloquently tonight.

The measures that I have described will ensure that our communities continue to benefit from a vibrant post office network and a reliable universal postal service. Safeguarding the Post Office and the universal postal service is at the very heart of the Government’s policy, and I hope that I have been able to reassure the hon. Gentleman on that point.

Question put and agreed to.