Royal Mail

Chi Onwurah Excerpts

Thursday 17th June 2021 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a great pleasure to serve under your chairship, Ms McDonagh. I congratulate the hon. Member for Wantage (David Johnston) on securing this important debate. This will be the first time that I have spoken as shadow Minister for postal affairs, and I pay tribute to my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) for all her work on this critical service.

Every Member who has spoken has emphasised the importance of Royal Mail to communities and businesses across the UK, as seen most recently and indeed currently, during the pandemic. In the face of covid-19, our local posties stepped up as key workers, keeping us connected, enabling small businesses to continue trading, and playing a vital public health role. Royal Mail delivered and collected tens of millions of covid-19 tests, distributed 1.5 billion items of personal protective equipment to our frontline workers, and delivered more than 300 million vaccination letters. I thank Royal Mail staff for their commitment during the pandemic, and reassure them that, as this debate has shown, it has not gone unrecognised. I pay special tribute to the posties whose smile and cheery hello, despite their higher rate of covid as a consequence of their frontline work, was for many the only real human contact during the darkest days of lockdown.

Royal Mail traces its history back to 1516, when Henry VII introduced a master of the posts. Under state control, Royal Mail successfully established itself as a leading and innovative pioneer in postal services, achieving many global firsts, such as the first uniform postage rate in 1839, and the creation of the world’s first stamp in 1840—my understanding is that that is why the UK is the only country that does not have its name on the stamp, but just the Queen’s head. There was also the introduction of first and second-class letter services in 1968, and the launch of the UK’s first digital stamp in 2004. Today, Royal Mail connects more than 30 million addresses across the UK, employing more than 160,000 staff.

In 2014, however, the Tory-led coalition chose to privatise the postal service. That mistake is estimated to have lost the taxpayer £1 billion, according to the Business, Energy and Industrial Strategy Committee. Labour fought against that, arguing that privatisation would prioritise profit over services. Unfortunately, that has become a reality, which is why Labour remains committed to supporting the public ownership of Royal Mail.

As many have pointed out, Royal Mail recorded record profits—the newly appointed CEO takes home £525,000 per year—but consumers and workers have paid the price with rising costs, longer delivery times and job losses. In the last year alone, there have been two above-inflation increases to stamp prices. In January, as the hon. Member for Wantage pointed out, the price of first-class stamps increased by 12% to 85p, while various operational changes, such as online stamp printing, the reduction of opening times and the closure of sorting offices, saw 12,000 jobs lost by 2017. That is in addition to the loss of 2,000 managerial roles as a result of restructuring during the pandemic.

I am also the shadow Minister for digital, and I know all too well the impact of digital exclusion on the UK and how Royal Mail allows many excluded communities to remain connected. Between 2013 and 2017, the closure of 75 delivery offices disproportionately impacted those who rely on them most, as my hon. Friend the Member for Hornsey and Wood Green (Catherine West) emphasised. As delivery offices play the important role of ensuring that undelivered mail can be conveniently collected by the recipient, their closure often causes avoidable stress for individuals who are forced to travel further and owners whose businesses require the frequent collection of parcels, as my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) pointed out. Workers have also been collateral damage in Royal Mail’s mission to maximise profits. In 2018, after months of disputes between Royal Mail and the Communication Workers Union, a package covering pay, pensions and working conditions was agreed to. Despite union members voting overwhelmingly in favour of the deal, Royal Mail abandoned the agreement in 2019, leading to the biggest vote for national industrial action since the passing of the Trade Union Act 2016. The Communication Workers Union has worked hard to reach a new agreement. What steps is the Minister taking to ensure that Royal Mail management has a better grasp of effective industrial relations and supports good jobs, as emphasised by my hon. Friend the Member for Hornsey and Wood Green?

Royal Mail is the UK’s sole designated universal service provider. That is an honour and a privilege, and means that it is so important to our communities. It remains the UK’s largest postal operator: 75% of small and medium-sized businesses surveyed by Ofcom in 2020 cited Royal Mail as their main postal services provider. Although letter volumes declined by 25% during the pandemic, the demand for parcel delivery increased by 32% as consumer behaviour changed.

We heard from the hon. Member for Wantage anecdotal evidence of parcels being prioritised by Royal Mail. The UK parcel market is highly competitive. Although Royal Mail continues to hold the largest share, at 35%, other providers, such as Amazon and Hermes, are on the rise. What recent assessment has the Minister made of competition in this market? What impact does cross-subsidy, which is prevalent in Amazon’s retail sector, have? What is the impact on the environment and our climate change commitments of charge-free delivery, which is associated with, for example, Amazon Prime, which encourages parcels to be ordered and delivered individually?

As we have heard, posties have worked tirelessly through the pandemic. We have also heard disturbing details about the service disruption resulting, at least in part, from higher levels of sickness absence. In 2021, Royal Mail missed the 93% target for first-class mail being delivered the next working day by eight percentage points. Members highlighted that, behind that statistic, there are particular areas of very low performance, which has had an unspeakable impact on our constituents’ lives. That was particularly highlighted by my hon. Friends the Members for Dulwich and West Norwood and for Hornsey and Wood Green.

Does the Minister think Royal Mail did all it could to inform people of service disruptions? How can we better hold Royal Mail to account for the impact of that disruption? Royal Mail was not penalised during the past year because of the pandemic, but in 2018-19, Ofcom fined it £50 million for failing to reach first-class delivery targets. As we have heard, it consistently failed to meet targets, particularly in relation to special delivery, in the three years prior to the pandemic.

To improve its performance, Royal Mail has invested approximately £2 billion in modernising operations since 2013. That is to be welcomed but, despite that, Ofcom’s analysis of Royal Mail efficiency in 2020 found that it failed to meet its own productivity targets. Ofcom warned that, unless Royal Mail modernised its network to ensure that it served rural and urban spaces equally,

“the sustainability of the universal service could be at risk in the longer term.”

What steps is the Minister taking to ensure that the universal service delivery requirements are fit for purpose in relation to changing markets and consumer needs, and does Ofcom have the appropriate powers to monitor and enforce it, as Members have highlighted?

Before I close, I think it is worth mentioning the Horizon scandal, which was the largest miscarriage of justice in our history, with more than 900 false prosecutions, destroying lives, families and reputations. When the Horizon service was commissioned in 1999, the Post Office and Royal Mail were still operating under the same ownership and management structure. I hope that the Minister will confirm that Royal Mail is also learning the lessons of that scandal.

Finally, the Minister and I have discussed postcodes through parliamentary questions. In privatising Royal Mail, the Government also privatised our postcodes, and on the cheap. Royal Mail charges for access to the postcode address file even though much of the intellectual property comes from the local authorities who assign addresses. The Government’s national data strategy says that we will encourage data sharing, opening up data; yet this remains a significant barrier to communication, location and innovation, so what steps will the Minister take to address that?

Royal Mail is a UK institution of which we have been proud for hundreds of years, but this Government have failed to treat it with respect or care. Despite its importance to communities and the economy, the Government are failing postal service users and communities, putting ideology above competence in their privatisation, and now their monitoring and accountability to maintain the quality of services. Unfortunately, that is a theme with this Government. We have become all too familiar with the privatisation of profit and the socialisation of risk. Labour is committed to supporting a better postal service under public ownership.