Postal Services Bill

Debate between David Mowat and David Anderson

Wednesday 12th January 2011 Commons Chamber

[Mr Anderson]

I welcome the debate. Like the hon. Member for Colchester (Bob Russell), I do not want to see the privatisation of the Post Office at all, but if it happens the new clause will ameliorate its effects. Does anyone really believe that the Post Office, going out into the world of competition, would be able to survive against some of the competitors it would be up against? The case for going outside has not been made, but if it does go outside, the Post Office should be protected. I am not quite sure where the Liberal Democrats are coming from—there is nothing unusual in that—but they seem to think that European Union law stops us passing this new clause. We have had no evidence to demonstrate that, and I do not believe that any evidence was shown in Committee either.

I hope that the Minister will explain exactly what rule in European legislation prevents an inter-business agreement. Everybody else who appeared before the Committee seemed to think it was a good idea. George Thomson of the National Federation of SubPostmasters said:

“On separating Post Office Ltd from Royal Mail, it is unprecedented and we have to get it right, which is why we need a 10-year inter-business agreement… We need security for sub-postmasters; they have £2 billion of their own money invested in this business. If you were a company investing £2 billion in a PFI…you would get a 21-year contract. I am not asking for a 21-year contract, but…for a 10-year IBA contract.”––[Official Report, Postal Services Public Bill Committee, 9 November 2010; c. 29, Q70.]

He was not alone. Paula Vennells, managing director of Post Office Ltd, who ought to know as she was part of the new management, said that

“we have a very strong commercial relationship with Royal Mail and that is something that both businesses would want to continue, so as we transform the post office network we will make it into something that Royal Mail will want to use.”

Moya Greene, the chief executive of Royal Mail, concurred, stating that it was

“unthinkable that we would not have a very long-term relationship with the Post Office.”––[Official Report, Postal Services Public Bill Committee, 9 November 2010; c. 17-18, Q42.]

Even Richard Hooper, who brought forward the original report, said in the updated report that he believed that the

“importance of the inter-business agreement should not be underestimated”.––[Official Report, Postal Services Public Bill Committee, 11 November 2010; c. 114, Q228.]

It is a shame that those three people did not say that they wanted the IBA to continue in the way the amendment suggests. If we do not have that in black and white, we shall experience a rerun of what we witnessed in the Chamber between 12 and 12.30 pm today, when the Prime Minister repeatedly replied to questions by saying, “We hope that this can happen”, “We wish this to happen”, or “We are looking into ways of making this happen.”

If privatisation takes place in the way that is being proposed, when the contract goes outside people will eat it up. I spent 30 years in the trade union movement trying to unravel agreements and contracts or renegotiate agreements with organisations. I would say, “That must be there in black and white. If it is not in it, you cannot win it.” If we do not provide protection for Royal Mail and the Post Office that works in the way in which the IBA has worked so far, the service will clearly not be saved.

I appreciate that members of the Government are naïve amateurs who are doing their best to make things work, but that is not good enough. We need to ensure that services are supported. We are told that European Union rules are preventing that, and I hope that the Minister, who has now returned to the Chamber, will be able to explain exactly how they are doing so. When Corus was threatened with closure on Teesside, my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) and I were constantly told that EU rules prevented Government intervention. We were told that the Germans and the Dutch used those rules, and that the British must play by the rules. We were losing out. Unless we have real, clear evidence that this cannot be done under law, the Government’s case will not hold water.

[David Mowat]

The hon. Gentleman has talked of the way in which the IBA works, which seems to have resulted in three quarters of the network becoming unsustainable or unviable. How does he think that extending the IBA in its current form will improve the position?

[Mr Anderson]

The hon. Gentleman is clearly under the misapprehension that public service is about nothing more than making money. We must accept that the public sometimes have to pay for the delivery of a public service in a way that does not satisfy accountants. We have a health service that costs £100 billion. No one says that it is in deficit. We have a defence system that effectively requires us to pay out all the money: we are not given any proper help. The postal service is also a quality public service that we should be proud of. The Labour Government invested a large amount of public money in it, but the truth is that we did not succeed. We were maintaining post offices that we had to accept were effectively a drain on public resources. The question that we must ask, and the question that people in the country will ask, is whether this is money well spent, and I would argue that it is.

[David Mowat]

I entirely agree that the sustainability of the post office network is a valuable public service, which is why I am delighted that the Bill will provide £1.3 billion to sustain it over the next four years—an average of £40,000 per post office per year. What I want to understand is how the continuation of an IBA that has apparently caused three quarters of the current network to lose money will help.

[Mr Anderson]

I think that that question should be put to Ministers. Nothing else will change: the need is still there, and the service must still be provided. In the last Parliament we invested £3.9 billion in the network, but that was clearly not sufficient. As was pointed out by the hon. Member for Angus (Mr Weir), we must accept that we are living in a different world now. People are obtaining their television and driving licences on line and using e-mail, but that does not mean that we as a nation should not be prepared to say that the post office network is so important that it should be subsidised by the public purse.