Postal Services Bill

Jake Berry Excerpts

Wednesday 27th October 2010 Commons Chamber

[Richard Graham]

My hon. Friend is absolutely right, and what he describes is precisely why he and I welcome what the Secretary of State said. I also pay tribute to the detailed work done by the Post Office Minister before this debate.

Interestingly, the right hon. Member for Southampton, Itchen (Mr Denham) called for a Postal Services Bill lite. It would be lite in every way when it comes to investment because by trying to insist on Government retention of a majority stake—precisely what the previous Labour Government proposed in their Bill, which they unfortunately failed to take forward—he is condemning Royal Mail to not being able to get that investment. No private investor would be able to match the sort of investment in Deutsche Post, to which I alluded, of £15 billion unless they had a controlling stake in the company.

As we have heard, the Bill makes it clear that the Hooper report’s essential demand for greater investment and modernisation, despite the progress made in the modernisation agreement between Royal Mail and the Communication Workers Union, is vital to the future of this great British asset. The Labour party has not left this Government the luxury of providing that investment themselves. We can provide it only by attracting it from the business sector.

[Jake Berry (Rossendale and Darwen) (Con)]

Does my hon. Friend agree that the best way of bringing such investment into the company is this privatisation? Does he also agree that this may bring with it the rigours of the private sector in terms of efficiency?

[Richard Graham]

My hon. Friend makes a very good point, and I think that he, like me, would support the new chief executive of Royal Mail, who is taking steps in precisely the direction he describes.

My second point relates to the expansion of opportunities for our post offices, which hon. Members on both sides of the House agree are such a vital feature of our communities. The Bill paves the way for a much greater opportunity for post offices to be Government front offices, offering them as outlets for services for those in our communities, especially people who do not use the internet. That could include the certification of documents, hard copy form applications and access to all our banks, which I shall discuss in a moment. I very much look forward to the newly formed Gloucestershire Credit Union’s services being available to the poorest and most vulnerable in Gloucester through our post offices.

There is still work to be done by all parties involved, and I wish to make several specific recommendations. First, the Government should be able to confirm as soon as possible that the Department for Work and Pensions will renew the green giro service or the access to benefits in our post offices for communities. Secondly, Ofcom should agree a significant increase in the current 12p to 14p pricing of the final mile of delivery, which has been under-charged for too long. Thirdly, Royal Mail should confirm its own support—I hope that this will also have Government support—for a new 10-year contract for the inter-business agreement with Post Office Ltd. Fourthly, Post Office Ltd should come up with detailed plans for its own mutualisation. Fifthly, large banks, especially those that are partly or significantly nationalised, should confirm that post offices will be able to access all their services over the counter. Lastly, it will be incumbent on all of us in our constituencies to ensure that we give maximum support to our post offices.

There is one last point to make. We know that only a third of post offices are profitable and that more than 6,000 are not making profits. Of course, the Government’s one-off injection of £1.34 billion will help enormously and we should all be very grateful for that, but none the less these are small businesses. If a sub-postmaster decides to retire or to give up the business, this Government and this Bill can offer no guarantee that the post office will stay open. What they can do is provide a guarantee that there will be no further Government-driven programme of post office closures. It will then be incumbent on us all to try to ensure that the post offices are attractive enough to have a wave of new applicants.

I hope that I have shown where I believe there is work still to be done by all parties involved and also that this Bill offers a real way forward to respond to the three things that we all support: a flourishing collection, sorting and delivery service by Royal Mail; the universal delivery; and thriving community post offices. That is what we want to achieve, that is what the Bill offers and that is why I shall support it. There should never again be the shambles of the Kingsholm post office scenario.

--- Later in debate ---

[Jake Berry (Rossendale and Darwen) (Con)]

Today’s debate has been very interesting. I will set out—briefly, because time is short—why I support the Bill.

Years of falling mail volumes—down 15% since their peak—together with low profit margins and a huge pension deficit have mortally wounded our Royal Mail. Doing nothing is not an option if we are to retain a world-class mail service and, most importantly, retain our world-class work force within it. Real reform of Royal Mail was put in the “too difficult” pile by the previous Government, but there were some attempts to change our post office network, including the closure of 5,000 post offices. In my constituency, this included our village shop, and it was a double blow to the rural community. We have lost services such as Sunnyhurst post office, which is still missed by the residents of Darwen. Nothing could have better shown the chaos of this closure programme than the former MP backing the campaign by the Lancashire Telegraph to keep the post office in Darwen and then voting in this place against our proposal to stop such closures.

These losses of service have been most keenly felt in our rural areas, where a lack of broadband and other forms of rural isolation mean that residents are heavily reliant on the postal service to keep in touch with the outside world. I have recently written to Royal Mail after learning that postmen working in the village of Edgworth in my constituency have been instructed to return undelivered packages to Bolton rather than to our small post office in Edgworth. Residents are now expected to make a 14-mile round trip and use a sizeable part of their day to collect parcels. Other poor reforms by the previous Government included the loss of the morning delivery in many areas, including at my house, where we wait until 1 pm or 2 pm for the post.

The Government’s proposals, set out in this Bill, are a once-in-a-generation opportunity to transform the culture of Royal Mail. It will open it up to private investment and expose it to the rigours of private sector efficacy but it will, crucially, maintain the universal postal service. When looking at these proposals, we must keep in mind that the real experts in this field do not sit in this House—they are the people who work in Royal Mail. That is why I am delighted that the Bill includes the principle of 10% ownership for employees and the mutualisation of the Post Office.

Supporters of the radical changes that this Government have brought about in schools know that the expertise for running schools does not rest in Whitehall. Likewise, the Bill acknowledges our world-class work force, their passion for the business, their dedication to service and their future at the heart of Royal Mail. If Royal Mail is to modernise, it must bring its work force along with it, and I believe that the 10% ownership measure will do that. Crucially, however, it must avoid militant opposition to privatisation. During the last Royal Mail strike in Manchester, the business in which I worked moved from sending out approximately 1,000 invoices a month via mail to an online and e-mail invoice delivery system. I am sorry to say that after the strike ended, having spent time and effort on moving the system online, we never went back to posting our invoices again. I urge the unions not to swing a wrecking ball at Royal Mail. Royal Mail undoubtedly faces challenges from falling mail volumes, but we must be realistic, and I am sure that a modern Royal Mail with proper employee participation would meet every challenge ahead of it.

Although we currently have 51 licensed postal operators, Royal Mail has not previously been attractive to outside investment owing to its pension deficit. Again, doing nothing is not an option. In this Bill, the new coalition Government take on the deficit, putting the company on a firmer footing while protecting the pensions of all Royal Mail employees past and present. I support the Bill, I support the universal postal service, and I applaud the principle of employee participation.