Future of Postal Services

Gary Streeter Excerpts

Tuesday 10th January 2023 Westminster Hall

[Sir Gary Streeter (in the Chair)]

Before I call Tahir Ali to move the motion, there is obviously a cast of thousands here. It is a one-hour debate, and the Opposition Front-Bench spokespeople will speak for five minutes and the Minister for 10 minutes. When Tahir has sat down, I will let you know what your life expectancy will be, but it will be about two minutes, so you should prepare for that. I might give you one minute more, Jeremy, but for most of you it will be two minutes.

[Tahir Ali (Birmingham, Hall Green) (Lab)]

I beg to move,

That this House has considered the future of postal services.

It is indeed a pleasure to serve under your chairmanship, Sir Gary, and I refer you to my entry in the Register of Members’ Financial Interests as a proud member of the Communication Workers Union and an employee of Royal Mail.

The question of the future of postal services has been thrown into stark relief in recent times. The pandemic meant that many were confined to their homes, reliant on deliveries to meet their basic needs. It became clear to everyone that postal workers were key to the economy and to the regular functioning of our society. For many during lockdown, the relief provided by our postal services was vital in maintaining wellbeing and keeping families and communities safe.

During the pandemic, the volume of parcels delivered grew by a staggering 50%, with a total of 4.2 billion parcels delivered in the year 2020-21. Royal Mail saw its parcel volumes increase by 30%, with a total of 1.7 billion parcels delivered, which means 40% of the total number of parcels delivered in the UK were delivered by Royal Mail.

--- Later in debate ---

[Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)]

I thank my hon. Friend for giving way and for securing this debate. As we all know, he has a huge interest in the service and has worked for a long period in it, supported by the people who work continuously. I visited a number of post offices and distribution offices during Christmas, when all the cards and everything else are sent.

This current management structure is purely about asset-stripping and making money out of the service in the short term, and getting rid of the whole service. I think it is incumbent on this Government and the Minister who is here today to have a far more serious debate—I am sure that my hon. Friend would lead it—about ensuring that Royal Mail remains a proper public service for all those people, from grandparents to grandchildren, who enjoy all the cards and other mail that they receive every day.

[Sir Gary Streeter (in the Chair)]

Order. I remind hon. Members that interventions should be brief. If we have many more, there will not be any time for speeches.

[Tahir Ali]

I thank my hon. Friend for his intervention. He is always keen to visit the local mail centre. Under the boundary changes, that mail centre will fall in his constituency, so we can visit it jointly.

I believe that Royal Mail should be renationalised, and I am not alone. A recent poll showed that 68% of the public back the renationalisation of Royal Mail, and studies have highlighted that renationalisation might save £171 million a year. However, we cannot talk about postal services and the renationalisation of Royal Mail without discussing the post office network. The network is inarguably one of the most important for small businesses and local communities, which rely on their local post offices to collect and receive parcels and letters, as well as to export items all over the world.

--- Later in debate ---

[Several hon. Members rose—]

[Sir Gary Streeter (in the Chair)]

Order. Colleagues, the wind-ups will begin at 5.38 pm. That gives us 15 minutes. Twelve people were standing, so you have one and a half minutes each.

[Andy Carter (Warrington South) (Con)]

Thank you, Sir Gary. Occasionally, sitting on the Government Benches, I wonder whether I am going to get in on a debate, but today I have. I thank the hon. Member for Birmingham, Hall Green (Tahir Ali) for bringing forward the debate. I am conscious that there is another debate later in the week on a similar topic, so I will confine my observations to two or three areas.

Let me start by saying that I agree with many of the things that the hon. Member raised about the hard-working posties who deliver mail to homes across the UK. They provide an invaluable service. Anyone who recognises the time spent waiting at Christmas for a card or parcel to arrive knows how important that service is. But it is also important to say that when the market changes, companies operating in those sectors have to change. If they do not, they simply will not be around in the future.

I put that point in the context of the number of letters that are sent by individuals in the UK annually. In 2004-05, Royal Mail delivered around 20 billion letters. Last year, that figure had dropped to 8 billion. The change is dramatic, and is not surprising when we consider how we live our lives today. We simply do not send as many things in the post as we once did.

While I absolutely agree that the universal service obligation should be retained, there is a need for Royal Mail to reconsider how it operates, to ensure that everybody continues to get the services. Crucially, it is the parcel market that is important. That is a vital sector for my constituency and I look forward to speaking further on this issue in coming weeks.

[Sir Gary Streeter (in the Chair)]

One and a half minutes flies by. I call Jeremy Corbyn.

--- Later in debate ---

[Jeremy Corbyn]

I am not calling the hon. Member incompetent.

[Sir Gary Streeter (in the Chair)]

Order. No interventions, please.

[Jeremy Corbyn]

It is up to the Government to intervene now to protect the USO and take Royal Mail back into public ownership, which it should never have left.

--- Later in debate ---

[Rachael Maskell (York Central) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Birmingham, Hall Green (Tahir Ali). Once a successful, proud British enterprise in the hands of the British public, Royal Mail is being driven into the gig economy while senior managers are milking profits and funnelling £560 million in payouts to shareholders. They did not get up in the middle of the night to travel to all parts of our country, especially during covid, to care for our communities.

So well depicted in Ken Loach’s film “Sorry We Missed You”, the gig economy’s long hours, low wages and punitive, bogus self-employment will soon besmirch Royal Mail as it sells off the King’s head. Royal Mail is wanting to break up the universal service obligations, sack 10,000 posties and be the next P&O as it recruits agency staff and owner drivers at the expense of the current workforce, further ripping up the pathway to change without having to give account.

This Government are standing by as this next chapter of fire and hire plays out. What have they done? They have walked away when they should be pressing in. They have opened the door for investors—a foreign private equity firm—to sweep in and asset strip. So much for giving back control—they are, to a Czech oligarch. I thank the CWU and its members for standing up for our postal service and bringing it to our attention. As with other companies in failure, the Government will put in place an operator of last resort. We are now at that last resort, and we need the Government to step in and nationalise this company.

[Sir Gary Streeter (in the Chair)]

After Richard Burgon, Members will have one minute each, so that everyone can get in.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

First of all, I will make a plea for post offices. For vulnerable people, those aged over 65, disabled people and those who live in rural areas, the post office clearly provides a wide range of essential services—services for the local community and citizens, including banking, bill payments and cash withdrawal. It helps older people seek their pensions and provides a sense of community for older citizens living in rural areas. Indeed, postmasters and postmistresses can often be the first to note if an elderly patron has not been in for a while, and many a life is saved by the actions taken. Post offices will also play a vital role in citizens receiving their £600 energy support payment in the coming weeks. Some 49% of all customers pick up Government forms such as applications for driving licences or passports at post offices.

I want to make a plea to the Minister on behalf of post offices. There are 11,400 post offices in the UK, visited by 28 million people a week. I support the debate and I hope that the Minister can support us.

[Sir Gary Streeter (in the Chair)]

Thank you, Mr Shannon, and I thank colleagues for their co-operation. We now move to the Front-Bench speeches, and it is a delight to call Marion Fellows.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)]

Sir Gary, could you clarify exactly what time I can speak until, if I am to give the hon. Member for Birmingham, Hall Green (Tahir Ali), two minutes in which to wind up?

[Sir Gary Streeter (in the Chair)]

Two minutes to six.

[Kevin Hollinrake]

Thank you. It is a pleasure to serve under your chairmanship, Sir Gary, and I congratulate the hon. Member for Birmingham, Hall Green, on securing today’s debate about the future of postal services, particularly given his experience and expertise. When somebody with that kind of experience and expertise speaks, we should all listen very carefully.

I agree with the hon. Gentleman that postal services are an integral part of the modern economy, allowing the smallest of businesses to connect with customers across the world and providing consumers with access to a vast range of products. The importance of the postal service to keeping people connected was never more apparent than during the coronavirus pandemic, and I am hugely grateful to the delivery workers who worked exceptionally hard to deliver letters and parcels in those very difficult circumstances. The post office network also plays a unique and vital role as part of the UK postal system, and I will address the points that were raised regarding that network shortly.

To deal first and foremost with the future of the universal postal service, which was raised by the hon. Member for Birmingham, Hall Green, the right hon. Members for Orkney and Shetland (Mr Carmichael) and for Islington North (Jeremy Corbyn), and others, the Government’s postal policy objective continues to be a financially sustainable and efficient universal service that meets the needs of users within an open and competitive postal market. That is why the six-day week, “one price goes anywhere” and the universal service remain at the heart of the regulatory regime, and why Ofcom has a primary duty to secure that provision.

To be completely clear, the Government currently have no plans to change the statutory minimum requirements of a universal postal service, which are set out in the Postal Services Act 2011. However, we accept that the universal postal service is facing challenges, particularly given the decline in letter volumes, which have halved since privatisation in 2013. That answers the question raised by the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), about why people are paying more for less. Part of the difficulty is that the volumes have fallen so much, which affects revenue.