Royal Mail

Ian Lavery Excerpts

Tuesday 25th June 2013 Westminster Hall

[Ian Lavery (Wansbeck) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) on securing this important debate.

The Government are pushing ahead with plans to privatise Royal Mail and hope to do so within the 2013-14 financial year. Members have declared interests. My interest is anti-privatisation. I am absolutely opposed to privatisation in any guise, for the right reasons. As my hon. Friend the Member for Blaydon (Mr Anderson) mentioned, we only have to look at the coal industry, which has been completely obliterated, and the electricity industry, in which the big six companies make billions of pounds in profits, while millions of people head toward record levels of fuel poverty. We only have to look at the privatisation of telecoms and of the railways, where fares are sky high and investment is completely lacking. Privatisation fails this country. The record is there to be seen. That is my declaration. We should stop kidding people that privatisation is in the best interests of consumers—as though calling them consumers makes them feel more important. We should really call them the general public.

The Government are desperate and seeking to generate as much finance as possible to get them out of the hole that they created. Consequently, they are determined to press ahead with the fire sale of Royal Mail, which is scheduled for this autumn. The decision to sell and when has been dictated by what is politically expedient for the Tories and the coalition in the short term, not what is best for the country. For the record, Royal Mail is making a profit. It is a profitable and efficient business. Its operating profits were £403 million last year, up from £105 million the year before. It is not a failing business; it is a very successful one.

Looking back on what has happened since the Government argued for privatisation, the original Hooper report of 2008 identified a number of issues faced by Royal Mail. Many of those issues have been resolved, notably the pension deficit and regulation, which leaves the Government’s case resting entirely on Royal Mail’s need to access capital. Royal Mail is doing well in the public sector, and it is my view, and I am sure that of most people in the UK, that it is a public asset and should remain so.

I thank the Royal Mail work force, who have embraced much change in the name of modernisation. They have done everything that has been expected of them to turn Royal Mail around, so turning it into the successful business that it is today. I have visited the Royal Mail in my constituency and been on a round with the men and women who do that fantastic job.

Contrary to the Government’s claim, there is no good reason why Royal Mail should not be able to borrow the capital that it needs to invest, while remaining in the public sector. That would not be at the expense of public sector spending, and it would not need to count towards Government debt. In 2008, the Hooper report identified five problems with Royal Mail that it argued needed to be fixed: the pension deficit, the relationship with the regulator, pricing, modernising performance and industrial relations.

The report made three proposals: that the Government should take on the pension deficit, that the regulator should be changed and that Royal Mail should be part privatised. On privatisation, the only remaining step not implemented, the Hooper report argued that Royal Mail was trying to improve industrial relations and the quality of management, reduce political interference, introduce commercial and financial discipline and allow access to private capital. On pensions, the Government took on the assets and liabilities of the pension scheme in March 2012. Since then, Royal Mail’s annual pension spending has fallen by up to £300 million as a consequence.

It is worth reminding the House what Communication Workers Union employees were asked. The hon. Member for Stourbridge (Margot James) said that she was not sure what was on the ballot paper. It said, “Do you oppose the privatisation of Royal Mail?” Can it get any simpler than that? It was pretty simple and not ambiguous in any way. The result was a 96% vote yes. The work force are totally behind it, and rightly refused to be bribed by the Government’s offer of shares or finance to privatise Royal Mail. We cannot continue to allow the likes of TNT and other companies that ignore good industrial relations with the trade unions and the workers and that pay well below the living wage to undercut such a fabulous service as Royal Mail.

Thank you, Mr Davies, for allowing me to speak. Put simply, the Labour party opposed the privatisation of Royal Mail while we were in government, and we continue to oppose it in opposition.