Postal Services Bill

Debate between Gordon Banks and Alan Reid

Wednesday 12th January 2011 Commons Chamber

[Mr Reid]

As I said in my interventions on the hon. Member for Angus (Mr Weir), I hope that the Minister takes away the proposal in amendments 12 and 13 to extend the universal service obligation for parcels to six days a week. As I said, I am concerned that parcels will not be delivered on Saturdays in the highlands and islands without such an extension. Apart from that one remaining concern, I think that the Minister has done a great job in the Bill to strengthen the USO in many ways, which is so important for the highlands and islands.

Amendment 14 deals with the hon. Gentleman’s concern that the geographical exceptions clause will be used to remove large parts of the highlands and islands from the universal service obligation. I do not share that concern. The wording is the same as that in the Postal Services Act 2000. The regulator, Postcomm, has used that exception only in a small number of cases, such as for islands that do not have a daily ferry service. Obviously, it would be nonsense for Royal Mail to charter a boat to an island to which Caledonian MacBrayne does not have a daily ferry service. The solution is for Caledonian MacBrayne to improve the service so that islands such as Tiree, Coll and Colonsay have a daily ferry service, but it is not for Royal Mail to charter special boats. Postcomm has also introduced exceptions on health and safety grounds, such as dangerous dogs. Under amendment 14, Royal Mail would have to deliver to houses with a dangerous path or animal. The wording in the Bill, which is taken from the 2000 Act, is satisfactory. I questioned Postcomm and Ofcom in the Scottish Affairs Committee and Ofcom gave an assurance that it will maintain Postcomm’s regulatory regime for geographical exceptions. Given those assurances, amendment 14 is not necessary.

[Gordon Banks]

I wish to speak to amendments 23 to 26, which we have tabled. Amendments 23 and 24 are similar to those tabled in Committee and are intended to ensure that no review of the universal service obligation can take place for at least five years after clause 33 is enacted. I note that the hon. Member for Northampton South (Mr Binley) tabled a similar amendment that was not selected, and I commend him for doing so. I trust that he will be able to support us in our aspirations tonight.

The minimum service requirements laid out in clause 30 are exactly the same as those set out in the Postal Services Act 2000. However, as my hon. Friend the Member for Llanelli (Nia Griffith) said in Committee, clause 33 will allow them to be eroded. The Bill sets in train a range of processes to reduce the universal service obligation, and I imagine that many Members fear that we cannot even be sure to which Secretary of State the powers in clause 33 will fall. Perhaps it will not be the Secretary of State for Business, Innovation and Skills, and who knows, it may even be the Secretary of State for Culture, Media and Sport. Perhaps, if time allows, the Minister will be able to tell us which Secretary of State will inherit those powers if the Bill is passed, and then I will leave it to my hon. Friends to determine whether that is a good thing.

[Mr Reid]

I point out to the hon. Gentleman that clause 33(7)(a) states that the review of the minimum requirements would be subject to the affirmative procedure, so it would require a vote of both Houses of Parliament. The Secretary of State could not take the decision on his own. Is that not adequate security?

[Gordon Banks]

No, it is not, and I will come to that if I have time. The Minister will be aware of my office’s deliberations with him on parliamentary scrutiny when the Bill was in Committee, and I will deal with that matter if I can.

We believe that it would be better to relieve both potential contenders of the powers to be granted under clause 33(5). At least the current Secretary of State for Business, Innovation and Skills would then know about that change in advance, and it would have been made through the democracy of Parliament and not by the Prime Minister as punishment.

In a letter to the Public Bill Committee, the Minister mentioned the failsafe of clause 29(5), which is relevant to clause 33. However, that failsafe could work only if one had faith in the actions and intentions of the relevant Secretary of State, and we do not.

Restrictions to ensure that there could not be a review before five years had passed would provide important stability to both the business and customers following privatisation. The universal service obligation is of such immense importance that it will need that period to bed down under a new, private provider. I am afraid that throughout the Committee stage, the Minister was unable to convince my hon. Friends and myself why a review should take place after 18 months. We want a statutory period of five years, during which everyone would know that today’s universal service obligation was in place. We want the consumer to be protected. As it stands, the inter-business agreement could be subject to review after 18 months, when an Ofcom review of the USO could also be ongoing. That would mean turmoil. As the Minister heard in Committee and from some of my hon. Friends today, we have only his best interests at heart. I am trying to save him from that turmoil, and that caused by the Secretary of State.

The Secretary of State told Members on 27 October last year:

“The Bill will maintain the universal postal service at its current levels…I have no intention of downgrading this service.”—[Official Report, 27 October 2010; Vol. 517, c. 360-361.]

That does not square with the Bill’s contents, and the Secretary of State needs to come clean. If he has no intention of downgrading the service, why does he need a review within 18 months? In fact, the Bill is riddled with review opportunities. There are three—in clauses 29, 33 and 42. It is obvious that the Secretary of State’s actions in promoting the Bill do not live up to his words. Maybe, in line with other matters that he has promoted, he does not really support the Bill anyway.

We would argue that the modernisation programme under way in Royal Mail needs to be completed and bedded down before any review of the USO takes place. It is only a few months since Postcomm and Consumer Focus completed a review of customers’ universal service needs, and it is against that backdrop that the Government are proposing the minimum service levels in the Bill. There is therefore no good reason to recommence the review process within 18 months of the Bill being passed.

We do not believe that such a review at this time would be in anyone’s interests other than those of the provider, who may want to downgrade the service for a bigger shareholder return. More than anything, we want to protect the interests of the consumer. I believe that, in principle, the amendments have cross-party support. Whereas our appeals to the Minister and his colleagues in Committee fell on deaf ears, I am a little more hopeful today. Indeed, in accepting our amendments 23 and 24 today, the Minister would be committing himself to recognising the value of the current USO, while also alerting potential bidders to his clarity on the matter—after all, we are always told that that is what business wants these days. Our amendments will offer that.

It would be wrong for a business to purchase Royal Mail with the intention—or should we say the hope?—that a quick review by Ofcom and a stroke of the pen by the Secretary of State, or perhaps by some other Secretary of State, would lead to a better deal. Why do we have such fears? It is because we can see how committed the private sector is to the universal service obligation.

The Minister regaled the Committee on more than one occasion with his international understanding of postal services. I would therefore like to refer him to an article in Holland’s De Telegraaf on 9 June last year, so that he can test his Dutch reading skills, as opposed to his usual double-Dutch Government jargon. In that article, Pieter Kunz—I do hope that I have pronounced that gentleman’s name accurately—who is the managing director of TNT’s European mail networks, said that his company planned to cut 11,000 employees from its Dutch mail operations and wanted to move to a three-day-a-week delivery service. Mr Kunz went on to say that collection and delivery services would be outsourced, and that TNT would become managers of mail. However, the worrying bit about how the private sector sees the USO in the round came when Mr Kunz stated that the universal service obligation was

“a kind of Jurassic Park and we should get rid of it”.

The worry is accentuated by the possibility that TNT could be the successful bidder for a privatised Royal Mail.

Although Mr Kunz might think of the USO in such terms, my constituents and the businesses in my constituency see it as a valued, necessary and fundamental service. We want to prevent any such erosion wherever possible. I wish that we had an opportunity to guarantee the current service levels indefinitely, but I recognise that this is not the Government’s will. However, we want the minimum five-year period to be included in the Bill, I suppose for the very same reasons that Mr Kunz, and perhaps the Minister, do not.

Amendments 23 and 24 would allow the newly privatised Royal Mail to be secure in the current service delivery levels for the next five years without change. As the Bill stands, the first review could come along at any time and have far-reaching effects. I referred earlier to our time in Committee, where my hon. Friend the Member for Kingston upon Hull East (Karl Turner) said that a similar amendment was

“a reasoned amendment that turns on the issue of speed versus proper consideration.”––[Official Report, Postal Services Public Bill Committee, 7 December 2010; c. 592.]

He recognised that such a safeguard would prevent Royal Mail’s new owner or owners from exerting any pressure on Ofcom to re-examine the minimum requirements straight after a sale, as a way of trying to secure bigger returns for shareholders. However, he and other members of the Committee recognised too—I hope that other Members will recognise this today as well—that such a safeguard would also prevent Ofcom from undertaking a hasty review before the full effects of privatisation and modernisation were understood and their impact on the service evaluated.

It is not just those on this side of the House who want to protect the USO in the long term. The Federation of Small Businesses also believes that the USO

“must be protected and services must not diminish”,

stating:

“Any change to the scope of the USO could have a negative impact on small businesses.”

Indeed, FSB members have shown their further concern, in that 82% of small businesses want to keep the single UK-wide pricing structure. Then we have the National Federation of SubPostmasters, which has said that

“communities across the UK depend”—

that is the key word—

“on the six-days-a-week collection and delivery at a uniform and affordable price”.

Indeed, in their recent report, that august group of cross-party and pan-UK parliamentarians known as the Scottish Affairs Committee also expressed alarm about

“the Bill’s requirement for Ofcom to review the minimum requirements for the USO within 18 months. We fear this may be seen as an opportunity to decrease the requirements of the USO.”

Many Opposition Members get fed up with listening to the Government telling the country what they are doing to help small business, when there is precious little sign of such help in the real world. Here is an opportunity for the Government to do just that—help small business, support these amendments and support the Federation of Small Businesses.

Daylight Saving Bill

Debate between Gordon Banks and Alan Reid

Friday 3rd December 2010 Commons Chamber

[Gordon Banks (Ochil and South Perthshire) (Lab)]

I commend the hon. Member for Castle Point (Rebecca Harris) for bringing the Bill before us. I hope she is enjoying today’s experience a little more than the Postal Services Bill Committee, on which we both sit. I suspect she might have become sick of the sound of my voice over the past few weeks, but if she will tolerate me a little longer I might have something interesting to say to her.

The Bill certainly has a strong campaign behind it. The hon. Lady and those at Lighter Later deserve credit for so forcefully making their argument. Perhaps there is a less vocal and less organised argument against these proposals but, as we know, it is not always those who shout loudest who win the argument. The Opposition do not disagree with the aims of the Bill in principle, but we are concerned about how it will work in practice. I will come on to some of those concerns in a moment or two.

The basic goal of the Bill, as I understand it, is to examine the possibility of changing our daylight structure to ensure that we make the best use of the available daylight. Members on both sides of the House have contributed to a very lively and interesting debate, and not just today. As much as we would like to, we can never increase the number of daylight hours in each day. That is the will of a higher power, if Members believe in such a thing; if they do not, it simply has to do with how the earth spins on its axis. Either way, we have no control over it.

The Bill sets out provisions for a three-year trial of the new daylight regime. However, that trial can begin only after completion of a cross-departmental review by Government and the establishment of a commission to determine whether the change will benefit all parts of the United Kingdom. Even after that, the Secretary of State would have to lay an order before Parliament. It is therefore clear that any change to our time structure would have to clear a considerable number of obstacles—or perhaps I should say “checks and balances”—after Second Reading before anything came to fruition.

I commend the hon. Lady for being so conciliatory in the wording of her Bill, but I remain to be totally persuaded that the wider public are as convinced as has been suggested today. If the Bill were passed today, a trial period should be instituted before the implementation of any wholesale change.

[Mr Reid]

The hon. Gentleman mentions the three-year trial. Has he noticed that under clause 3 the success of the trial has to be reviewed

“Not later than six months before the Trial is due to end”?

Effectively, therefore, it is only a two-and-a-half year trial that could cover only two, not three, winters.

[Gordon Banks]

Irrespective of the length of the trial—two and a half or three years—it is a substantial period that would enable the gathering of a significant amount of information and allow us to make the decision on the basis of information gathered in the UK, not in Indiana or somewhere else, and the decision would be based on the UK in the 21st century.

When I read the official transcript of the recent Adjournment debate on this subject, I was surprised by the strength of personal belief in favour of the change, but I was also impressed by the quieter voices arguing for the status quo. That clearly shows that there are differing viewpoints north and south of the border.