Postal Services in Scotland after 2014

Jo Swinson Excerpts

Wednesday 10th July 2013 Westminster Hall

[Mr Davidson]

Yes, I am aware of that. That is why I am saying that I can see no reason why the hon. Gentleman’s party, the Labour party and indeed the Greens, who I understand also oppose privatisation, should not be campaigning jointly against the forces of darkness, as represented undoubtedly by the Conservatives. What surprises me is the way in which the Liberals seem to be aligning themselves with the forces of darkness on privatising the Post Office. A year ago, two years ago or three, four, five years ago, who would have expected that the Liberals would be the people proposing the privatisation of the Post Office in the House this afternoon? That is a disgrace. [Interruption.] If my chuntering friends from the SNP are willing to campaign with us, we will campaign across Scotland.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

Will the hon. Gentleman give way?

[Mr Davidson]

I will give way to the chuntering Liberal.

[Jo Swinson]

It may be helpful if I correct the record. The hon. Gentleman just mentioned the privatisation of the Post Office, but it is important to be clear that this is not about the privatisation of the Post Office. Royal Mail is up for privatisation; the Post Office is absolutely not.

[Mr Davidson]

I thank the Minister for that clarification. I am sorry, but like many of us, I remember the days when Royal Mail and the Post Office were part of the same organisation. I sometimes have a tendency to use the names interchangeably. I excuse her from any suggestion that she is in favour of privatising the Post Office. However, she does stand charged of wanting to privatise Royal Mail. If she wants to correct that, I would be more than happy to give way to her again. [Interruption.] All right, there is silence.

[Mr Davidson]

I am not suggesting, nor have I suggested at any point, that the SNP supports privatisation. Despite our disagreement on those issues on which the SNP is wrong, we can work together to oppose the privatisation of the Post Office. I see no difficulty on that whatsoever. It is entirely possible to find ourselves in strong disagreement with people on some issues yet work together with them on others. I extend the clenched fist of friendship—[Laughter.] I extend the hand of friendship so that we are able to work together against the Liberal proposal to privatise the Post Office.

[Jo Swinson]

rose—

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

That’s the wrong name.

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[John Robertson (Glasgow North West) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Hood, and I congratulate my neighbour across the Clyde, my hon. Friend the Member for Glasgow South West (Mr Davidson) on securing the debate.

I know what privatisation is all about. I was a member of the General Post Office. That became the Post Office, which was then split up into the Post Office and British Telecom, which I became an engineer in. Of course, the Post Office has now been split up into Royal Mail and the Post Office.

More than 250,000 people were working for BT when it was privatised in the 1980s. I am not sure of the exact figure these days, but it is around the 90,000 mark. That gives some idea of what has happened to a privatised industry over the years. Some of those job losses would have occurred anyway because of new technology, but the same cannot be said for the Post Office, and Royal Mail and post offices have, sadly, seen staff numbers go down. Many hon. Members, particularly from the separatist party, have mentioned the CWU. I was a member of the CWU. I had the honour of being a member of that union back in the days when it was the POEU, the Post Office Engineering Union, and then the NCU, the National Communications Union, and a very good union it was too. Then I became a member of Connect, which was for the management side of British Telecom, and from there I became a Member of Parliament.

What could happen to the Post Office in the years ahead I do not want to think about. My hon. Friend the Member for Glasgow South West is right to say that the Liberal Democrats have taken on the role of head executioner and are being used yet again for legislation that is not what the country would vote for if it was given a vote on this issue. The Minister is another of my constituency neighbours; her constituency is to the north of mine. I look forward to it coming back to Labour at the next election and having a Labour neighbour next time round. Her party is doing its best to ensure that she is not re-elected.

We have seen already the cherry-picking that goes on in the post office industry. That worries me a great deal. As the Post Office is sold off, we have seen what services the Scottish Government are using. My hon. Friend the Member for Glasgow Central (Anas Sarwar) mentioned this. DHL delivered 6,162 items, costing £220,047, in 2009-10 alone. FedEx—it is important that we mention all these things—delivered 1,566 items, costing £49,514. An £8 million contract was given to TNT in 2009. The Scottish Government can say that they were adhering to the rules. I do not know that that is true. I am not saying that it is not true, but I do know that they cannot spout about how much they are doing to protect post offices and post office workers and at the same time undermine their jobs.

How does that compare with the present UK Government? They want to get rid of the Post Office. Hon. Members have said that the previous Government wanted to get rid of it too, but I say to them that it was Labour Back-Bench Members who stopped that privatisation or partial privatisation. It was not Liberals. It was not the SNP. It was not Conservatives. It was Back-Bench Labour MPs such as my hon. Friend the Member for Glasgow South West, who secured this debate, who spoke the loudest to try to stop that privatisation, and they did.

[Jo Swinson]

I just want to bring this clarity to the debate. Yet again, the hon. Gentleman has been talking about privatisation of the Post Office; I think that he means privatisation of Royal Mail.

[John Robertson]

No, I was talking about privatisation of the Post Office. Let us remember that the Post Office was split into Royal Mail and the Post Office. The next step of privatisation will involve the Post Office. The hon. Lady may be confused. Then again, I could be confused—that is always possible—but I do have some questions to ask her and I would like to know whether she has asked questions of the Scottish Government about exactly where we are in relation to privatisation of the Post Office. What will happen in Scotland in the event of privatisation? What about what is happening in 2014? Have the Government taken that into consideration, albeit that the bookies are giving odds of 1:9 on separation? We hope that we will not have that, but what are the implications for the free movement of post across the border?

Has the Minister asked the Scottish Government what they would do in relation to the free movement of post that has originated from south of the border or, for that matter, from Northern Ireland? What would the impact be on Scottish businesses in those circumstances? What planning have the Scottish Government done in relation to separating Royal Mail and the post offices in the event of a 2014 win on their part?

What would the impact be on jobs? We have heard that there are 12,500 jobs in the post office industry north of the border. We heard comments on this issue from the hon. Member for Angus (Mr Weir), whom I have a lot of time for. We have been on Select Committees together, and I respect him in a lot of ways. We do not always agree with each other—that is for sure—but he is usually worth listening to, although perhaps not so much today. I am trying to find out different bits and pieces of information and I have further questions for the Minister, but I do want to congratulate the hon. Member for Angus, because it would be churlish not to, on the early-day motion that he tabled, with the support of the CWU. It got cross-party support from 71 MPs. Funnily enough, there were no Tories, but he did get some Liberals, yet it is the same Liberal party that is helping to front up this future privatisation.

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[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

It is a great pleasure to serve under your chairmanship, Mr Hood. How apt it is to have a Scot in the Chair for a debate on the important matter of postal services in Scotland post-2014. I thank the hon. Member for Glasgow South West (Mr Davidson) for securing the debate, and for his wide-ranging introductory speech. We have covered a good amount of ground today; indeed, I wondered at times whether we were in a rerun of a debate from two weeks ago on the privatisation of Royal Mail. I know that the hon. Gentleman was unfortunately not able to attend that debate, but I hope he is able to be in the Chamber later today for the Secretary of State’s statement on this issue. The hon. Member for Angus (Mr Weir) mentioned that there may well be further opportunities for discussion in Backbench Business Committee debates, if the Committee so agrees, so I am sure that we will return to the issue time and again over the next few months, and beyond.

In 2014 we face an historic choice in Scotland—arguably the most important vote that Scots will have cast in decades. I hope that there will be a high turnout in the independence referendum, and I very much believe that the Scottish people will decide to reject the notion of independence because we are better off as part of the United Kingdom. It is important that over the next 14 months or so we continue to have a full and healthy debate about all aspects of what such a change would mean for everyday life in Scotland. The Government are, of course, making the case that Scotland should remain in the United Kingdom, and as part of that we are carrying out a programme of analysis across a number of Departments about Scotland’s place in the UK and how it contributes to, and benefits from being part of, the UK.

I am sure that right hon. and hon. Members are aware of the paper that the Department for Business, Innovation and Skills produced on 14 June, which demonstrated that Scotland and the rest of the UK benefit from the domestic market and the shared business framework that underpins it. The paper had a section on postal services as part of a more general consideration of infrastructure in Scotland. We take the view that we are better and stronger together as part of the United Kingdom. We are not making contingency plans for the Scottish people deciding to leave the United Kingdom because we do not believe that that will be the outcome, but it is absolutely for the Scottish Government to set out what would happen in that scenario, given that it is they who are advocating the change, and that is a challenge for the SNP.

We have had a fair challenge from the hon. Member for Edinburgh South (Ian Murray) about the price of a stamp for a Christmas card because, although we have e-mail these days, there is something lovely about sending and receiving Christmas cards and people want to know how much it will cost. There are question marks over what the cost would be in an independent Scotland.

[Mr Weir]

The Minister says that the Scottish Government or the SNP have to make clear the cost of sending a Christmas card post-independence. However, under her privatisation proposals we do not know what the cost will be in 2016 for sending a Christmas card in the UK whether or not there is independence for Scotland, because there is no longer a price cap on anything other than second-class mail.

[Jo Swinson]

I welcome the hon. Gentleman’s intervention because it gives me the opportunity to confirm and clarify the situation. I appreciate that there are strong views on different sides about the privatisation of Royal Mail, but many wild stories have been going about. It is absolutely clear that the universal service obligation remains. The obligation is enshrined in the Postal Services Act 2011, which was passed by this Parliament. The Act sets out that there has to be a six-days-a-week service to every location at an affordable and uniform price. That provision is monitored by the regulator Ofcom, and will remain in place after privatisation. The exact same set of protections that is in place at the moment will, therefore, remain.

What is unclear, however, is what would happen in an independent Scotland. We do not know whether Scotland would be a member of the EU and therefore whether the EU postal services directive would apply. If we assumed that it did, there would have to be at least a five-days-a-week universal service—Ireland has such a service. Only five EU countries, including the UK, go beyond that and have a six-days-a-week service. We do not know whether it would be a five-day or a six-day service in an independent Scotland. The SNP says that it will give guarantees—I noted that from the speech made by the hon. Member for Angus—but it does not back up how it would do it.

This comes down to the basic economics point to which various hon. Members have referred, and which applies to both the Post Office and Royal Mail. What we have in Scotland is a different sort of demography and geography to that of the rest of the UK, which is something that the hon. Member for Glasgow North West (John Robertson) mentioned. His area is very urban, and the costs of the logistics of getting about to deliver letters are, therefore, lower than they would be in a very rural constituency. If one country has a higher proportion of rural areas and addresses than another—Scotland compared with the UK for example—the service becomes more expensive to operate, and that cost must be accounted for. An hon. Gentleman chuntered from a sedentary position, “Do you think that Scotland could not run a postal service?” Of course it could, but we need to know what the costs will be. To suggest that they would be the same as for running the service across the UK, where there is cross-subsidisation between more densely populated areas and rural areas to offset the higher costs in the latter, is to misunderstand the basic economics.

[Anas Sarwar]

I apologise to you, Mr Chairman, for chuntering from a sedentary position and getting told off by you, and at the same time I congratulate you on the fantastic jumper you are wearing on this summer’s day.

I have a great suggestion for ending the uncertainty, and the bickering between the Lib Dems and the SNP, and that is to vote no in the referendum next year and return a Labour Government in 2015.

[Jo Swinson]

I agree with the hon. Gentleman, on half of his point at least.

[Ian Murray]

Which half?

[Jo Swinson]

I wonder which half. For clarity, I mean on the voting no to independence in 2014.

We have had queries about the price of a stamp and about the universal service operating for six days a week rather than for the number of days required by the EU. Those questions are for the Scottish Government. Indeed, the hon. Member for Glasgow North West outlined a whole host of questions that the Scottish Government need to answer.

I want to turn now to the hon. Member for Dumfries and Galloway (Mr Brown). I welcomed his contribution about post offices, a topic that was missing from this debate on postal services in Scotland. As I have tried to make clear, the subject under debate is a very separate issue to that of the Royal Mail. We have had a fair amount of confusion. Royal Mail and the Post Office are now separate entities. The latter is a separate company with its own board, which will be helpful to its ultimate success. We do not want to get confused, particularly when we are talking about privatisation.

The hon. Member for Glasgow South West said that he was astonished that Liberal Democrats were proposing the privatisation of Royal Mail. I accept that our 2010 manifesto was probably not high on his reading list, but it is bizarre to be accused of something being a huge surprise when it was clearly set out in our manifesto at the last election. We want Royal Mail to be able to access private capital so that it can provide a good service to customers because, ultimately, that is what is important, and when Royal Mail has to compete with schools and hospitals for capital it is not able to do that.

The situation for the Post Office is incredibly different. We are aiming for mutualisation, and the process is under way with a stakeholder forum that includes the National Federation of SubPostmasters, the Communication Workers Union, Government and others. It is important that we work towards a sustainable future for the Post Office.

Time is against me today. I conclude by saying that the post office network plays an important role in Scotland. The hon. Member for Dumfries and Galloway outlined some statistics and, as I promised yesterday, I will write to him on the issue he raised. The fact that Scotland has 12% of all post office branches and 15% of all rural branches shows that we have higher than our population share’s worth of post office services. Under an independent Scotland the service would, therefore, cost more, and the Scottish Government need to give answers to the Scottish people.