Royal Mail and the Universal Service Obligation

Ian Byrne Excerpts

Thursday 12th January 2023 Westminster Hall

[Ian Byrne (Liverpool, West Derby) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Ali. I thank my hon. Friend the Member for Jarrow (Kate Osborne) for securing the debate.

Postal workers are the lifeblood of our communities, and they kept us afloat during the covid-19 pandemic. We clapped their selflessness and dedication. For many, they were, and are, the only source of human contact. They stepped up to the plate when we needed them most. It has been a pleasure to stand on picket lines in Liverpool, West Derby and witness the respect with which they are regarded in my community.

Royal Mail represents one of the clearest examples of the decimation caused by privatising a public service. It was established over 500 years ago, and the universal service obligation is now on the verge of being lost forever. That follows the service’s 2012 privatisation by the coalition Government. Royal Mail was profitable at the time of privatisation: in the year prior to its sale it reported a 60% increase in its pre-tax annual profits to £324 million. Privatisation was an awful decision.

Fast-forwarding to today, Royal Mail has paid out billions in shareholder dividends and millions in payments to chief executive officers, while hiking up stamp prices, cutting workers’ wages in real terms and failing to meet Ofcom targets for service provision. There is now an attempt by Royal Mail bosses to get the Government to change the USO, by asking to move to a minimum five-day delivery service for letters from the current minimum six-day service. While West Derby postal workers have been forced to food banks because of low pay, and 10,000 postal workers have been cut from the service in the middle of the cost of living crisis, CEO Simon Thompson received a £140,000 bonus. Royal Mail has also introduced owner drivers on lower pay and insecure contracts, which signals a move to a gig economy employment model. Workers on the picket line are terrified of that move; they are terrified for the people in their communities—not just for their own jobs.

Make no mistake: if Royal Mail’s senior leadership is allowed to continue with those plans, and with its mismanagement of the organisation’s funds, Royal Mail as we know it will simply no longer exist. It will no longer provide a service to over 32 million addresses daily. After 500 years of service, it will be broken up and turned into another gig economy parcel courier, leaving communities, businesses, customers and workers worse off. Will the Minister respond to the calls of the Opposition and the CWU and launch an urgent inquiry into the leadership of the Royal Mail, given that it is a key part of the UK’s national infrastructure and appears to have been brought to the brink of collapse due to the gross mismanagement of its business by the current management?

It is no surprise that the majority of voters want Royal Mail to be brought back into public ownership. Research from the University of Greenwich tells us that buying back Royal Mail would cost £4.6 billion, but £171 million would be saved every year, to be reinvested into the postal service. Does the Minister want to stand by and allow one of the most cherished foundation stones of our nation, the Royal Mail, to be lost forever? If the Government shared the CWU’s vision, the service could be at the forefront of the regeneration of our communities. Instead, it is becoming a hollowed-out and gutted UK version of some of the awful international companies in this sector that treat their workforce as fodder. We must be better than that. Those loyal postal workers deserve the Minister’s action and support. They and our nation deserve nothing less.