Royal Mail Privatisation

Debate between John Hayes and Anne Marie Morris

Tuesday 18th January 2011 Westminster Hall

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

It is always a delight to serve under your chairmanship, Mr Hollobone. It is a delight, also, to welcome a debate on the implications for the post office network of the privatisation of Royal Mail, and I congratulate the hon. Member for North Ayrshire and Arran (Katy Clark) on securing it. She introduced the subject with typical courtesy and clarity. I know that her concerns are widely felt, and I want to be as responsive and sensitive to those concerns as I can. I shall try to deal with as many of the points raised in debate as possible; I hope that hon. Members will not mind if I am not as generous as usual in taking interventions, as we have a lot of ground to cover.

The matter has been extensively debated over recent weeks, including during the Committee stage of the Postal Services Bill, the oral evidence session of the Scottish Affairs Committee, the Third Reading of the Bill last Wednesday and at Business, Innovation and Skills Question Time. Indeed, the matter has been aired in a number of forums. I fully appreciate that people are concerned about the future of the post office network. In essence, this debate focuses on that subject, and I shall try to restrict my remarks to that, for understandable reasons.

I start by putting the matter in context. I do not mean the economic context—the fact that the Government inherited the largest peacetime deficit in our history, and that the state is borrowing one pound in every four that it spends and is paying only the interest on the nation’s debt, which costs £43 billion each year, or about £120 million a day. That is not entirely relevant, Mr Hollobone, and you would not want me to dwell on it, but it needs to be said. I mean the context that surrounds Royal Mail—the need to invest in Royal Mail, to update it and to make it a business that can compete in an increasingly complex international scene.

As the hon. Member for Solihull (Lorely Burt) said, social change and the way in which people access, exchange and use information are having an impact on post offices and Royal Mail, as has the increasingly competitive nature of the marketplace. In order to get that investment, the Government needed to think afresh about the ownership of Royal Mail. That is widely acknowledged. I put on record the fact that that the previous Government were indeed considering the matter, and introduced a Bill in the Lords. Had they been re-elected, I have no doubt that we would be having a debate in Government time about the future of Royal Mail, but on a different set of assumptions about its ownership.

The context is one of a need for change, and a need for fresh ideas about how to guarantee a strong future for Royal Mail. In that spirit, I do not want to dwell too much on the previous Government’s record, but it would be remiss of me not to say that between 1997 and 2010, about 7,000 post offices closed, 5,000 of which were in two Government-funded closure programmes in 2003-05 and 2007-09. Government Members should not be expected to take too many lessons from the Opposition.

I do not want to be excessively partisan or to get into an argument about this, but the Government value post offices. We understand their social and cultural value as well as their utility. As constituency Members, we have fought for them to be retained up and down the land, so we have nothing to be embarrassed about in those terms. It is in that spirit that this Government approach the subject of post offices and make it clear there will be no further post office closure programme. That is enough of my partisan points; I just felt that it was important to put them on the record.

Let me make 10 points to kick things off, then I will try to deal with the points that have been raised in the debate. First, the Government have made it absolutely clear that the Post Office is not for sale. Secondly, we recognise that the Post Office is a unique national asset, so there will be no repeat of the closure programmes of the past. Thirdly, we have committed £1.34 billion to the Post Office for it to modernise its network and safeguard its future, thus making it a stronger partner for Royal Mail. Fourthly, the Bill before Parliament proposes to separate Post Office Ltd from the Royal Mail Group, thus allowing the Post Office to focus more attention on developing its business. It also allows for the possible future mutualisation of Post Office Ltd.

Fifthly, under a mutual structure, the ownership and running of the post office network could be handed over to employees, sub-postmasters and communities. Sixthly, the Government are committed to secure a sustainable future for the Post Office and we want it to become a genuine front office for Government at both a national and local level. Seventhly, we will support the expansion of accessible and affordable personal financial services that are available through the post office. Eighthly, we will support the greater involvement of local authorities in planning and delivering local post office provision.

Ninthly, the Government fully share hon. Members’ laudable interest in ensuring a strong commercial relationship between Royal Mail and Post Office Ltd, but we do not share the view that legislating for a contract of between five and 20 years is the way to achieve our shared objective. To pick up on the point made by the hon. Member for Llanelli (Nia Griffith), it is not just that that would make Royal Mail less saleable—although it might—but that it would be legally challenged under competition law and possibly internationally, too. I agree that it is important that the arrangements between Royal Mail and the Post Office are as secure as they can be, and I will return to that point and the particular question that she raised in a moment.

Lastly, as the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), made clear last week, stamps will continue to be issued in the same way.

[Anne Marie Morris]

I am delighted to hear the Minister’s comments about stamps, but I am concerned about those wonderful red pillar boxes and the monogram. Will the Minister confirm that they will also be protected?

[Mr Hayes]

I was about to say that stamps will continue to bear the sovereign’s head, which is right and proper. I hear what my hon. Friend says, and I share her view; it is important that we retain the iconic pillar box with the Royal monogram on. That is something that the Government will consider. I can say no more at this stage, but I know that my hon. Friend will want to take up that point and see what can be done.

In evidence to the Postal Services Bill Committee over recent weeks, there has been strong backing for the separation of Royal Mail and Post Office Ltd. I noted that no one made a case against that today. As I said, it was, I think, accepted by most Members in this House. They are different businesses that will benefit from focusing on different challenges. In his evidence to the Committee, Richard Hooper of Consumer Focus and Postcomm supported the separation of the ownership of the businesses.

In her evidence to the Committee, Moya Greene, chief executive of Royal Mail, said that it would be unthinkable not always to have a strong relationship between the Post Office and Royal Mail. To underline that point, Donald Brydon, Royal Mail’s chairman, pledged in his evidence that before any privatisation of Royal Mail could take place, a continued long-term commercial contract will be in place between the two businesses for the longest duration that is legally permissible—a point that was picked up by the hon. Member for Argyll and Bute (Mr Reid). Such a pledge provides a reassurance about the marriage between the two, which is essential to maintaining the post office network that we all feel so strongly about. This is done not for sentimental reasons, but because it makes good commercial sense. The post office network has an unparalleled reach and a very strong brand. As my hon. Friend the Member for Newton Abbot (Anne Marie Morris) said, we can be optimistic about the relationship. A stronger Royal Mail is more likely to secure the future of many more post offices. If we do not take the necessary radical steps to support and invest in Royal Mail, post offices will be at risk. That is something that we can look to with confidence, based on the belief that post offices not only provide important services, but are at the hub of local communities. The post office in my own village of Moulton, which is run by Gary and Jane, does an excellent job not just providing postal services but as a centre for all kinds of activities in the village. It is a shop, too, and provides a valuable local service.

As a representative of a rural constituency, I understand some of the concerns expressed by other rural colleagues. We heard from the hon. Member for North Ayrshire and Arran that there are concerns about the spread of the network—the universality. Let me make it clear that in terms of universality, the Bill will create a fundamental duty at the heart of the legislation for a six-day per week collection and delivery of letters at uniform and affordable prices. To do that, we need a service that is spread across the whole nation and not a partial service; we are committed to that and I personally feel very strongly about it.

It is important to say that the future success of the post office network will depend on its providing a fuller and wider range of services. I hear what my hon. Friend the Member for Warrington South (David Mowat) says about cost and subsidy. We can deal with that by allowing post offices to do more, thus ensuring that they can be profitable businesses. We are looking at a range of additional services—both local government and national Government services—that post offices can provide. Post offices can act as a front line for those clients or users that need to do things in their community in a way that is accessible and convenient. We are piloting a range of services that post offices can provide and, as a result of this debate, we will look at other things that Government can do to make the post office network more viable, commercial and profitable. I know that my hon. Friend is anxious about that and I understand why.

However, there will always be small rural post offices, perhaps in more remote communities, that will find it very hard to operate without subsidy. I do not have a problem with that. Post offices are so culturally and socially important that we need to take that on board. Certainly, all those that can be profitable should be profitable.

Local Enterprise Partnerships (South-West)

Debate between John Hayes and Anne Marie Morris

Wednesday 10th November 2010 Westminster Hall

[Mr Hayes]

I am delighted to say that my hon. Friend is absolutely right that local authorities should co-operate with each other in pursuit of that objective of economic development. We would expect them to co-operate, but the early stage will inevitably involve a process of negotiation and of bid and counter-bid. That is not unhealthy, provided that it does not delay progress unduly and Government play a helpful mediating role in assessing those representations against the core criteria, which I am about to discuss.

We announced the first wave of successful LEPs alongside the White Paper on 28 October. The first 24 partnerships—of many more, I am sure—all shared certain characteristics. Perhaps it will help the hon. Member for Chippenham and my hon. Friend the Member for Stroud (Neil Carmichael) if I describe those characteristics: they have a strong local identity; they have a buy-in from the business community; and they are a testament to the ambition and ingenuity of local people. That is what we expect of local enterprise partnerships.

In the south-west region, we received seven applications, two of which were approved. Each of the remaining five groups of applicants has been asked to do further work to develop their proposals, and we are supporting them as they do so. I understand why the right hon. Member for Exeter is making a strong case for his area—it is right that he should do so—but he should know that Devon, Plymouth and Torbay have been asked to hold further discussions with local business, civic leaders and the Government to develop the long-term vision for their partnership. In addition, they have been asked to consider in more detail their economic links with neighbours, particularly Somerset. The chief executives of Devon, Torbay, Plymouth and Somerset have embraced that feedback and are working together to secure the best outcome for their area, and we hope to say more in due course. The right hon. Gentleman will also be mindful that I have said that undue delay would be unhelpful.

[Anne Marie Morris]

I am delighted to hear what the Minister is saying. I am glad that progress is being made, and I welcome LEPs. They are absolutely the right vehicle, and the combination of local government and businesses is on point. I ask that a decision be made quickly—subject to all the bodies concerned giving him all the information that he needs—so that the deadline to apply to the regional growth fund is not missed. I hope that that will be present in his thinking and timeline, even though he cannot be specific.

[Mr Hayes]

My hon. Friend, like me, will want to ensure that the criteria are applied robustly and consistently. The right hon. Member for Exeter made the good point that we need to be certain that the marriage between local authorities is right, as is the link between them and business. I repeat that I share the view that the construction of areas should reflect their economic profile. That seems fundamental to making the scheme work well.

The right hon. Gentleman mentioned Cornwall, so I will give him a straight answer. Cornwall made a powerful argument for a local enterprise partnership covering Cornwall and the Isles of Scilly, making it clear that it was a functional area. The Department examined it closely and we decided, in the end, to support the partnership. I know that counter-arguments will be made, but as he knows from his long experience as a Minister, the Government sometimes have to take decisions. We took that decision, and I think that we can justify it based on the criteria that I have outlined. People from Cornwall would certainly argue that the area’s profile is very particular. The right hon. Gentleman will know the economic challenges that face Cornwall. Its issues include skills, employment and the character of the local economy, which legitimises the case that Cornwall made.

South-west Members, including the right hon. Gentleman, understandably make the argument that they do not want the south-west to be left behind. I assure him that we are keen to see as many local enterprise partnerships taking root as possible, both across the whole of England and in the south-west. We do not want any part of the country to be left behind, so as soon as a bid can demonstrate that it meets the assessment criteria, it will be given the green light.

I will say a word about Exeter in particular, as the right hon. Gentleman would expect me to do. I am aware that he is worried that his constituency might suffer disadvantage and that it will not be able to bid to the regional growth fund because it is not part of a partnership. Let me reassure him that although we expect many LEPs to submit project bids to the fund, it is not a prerequisite that applications for funding must be submitted by partnerships—any public-private partnership may apply. Exeter’s business community and local council—along with other potential partners, such as the city’s excellent university, which he and I both know—may work together on an ambitious plan for economic development and then apply for funding accordingly. Indeed, I take this opportunity to encourage them to do so. I know that the right hon. Gentleman, as a diligent local Member, will work with them to make it a success.

Government Policy (NEETs)

Debate between John Hayes and Anne Marie Morris

Tuesday 9th November 2010 Westminster Hall

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

As ever, it is a pleasure to serve under your chairmanship, Mr Chope. It is a particular delight to respond to this debate, secured by my hon. Friend the Member for Banbury (Tony Baldry), who I know cares deeply about such matters. I make it clear that I share his doubts about the label “NEETs”. For some reason, young people seem perpetually prone to being pigeonholed in unhelpful ways—from mods and rockers to hoodies. Of course such terms do not reflect reality and therefore do not do people justice. There is no such thing as a typical NEET; there are different groups of young people with particular kinds of challenges, different circumstances and different needs. As my hon. Friend said, it follows that we will be more effective in dealing with the problems and challenges they face if we have the flexibility to draw on a range of different options and build on best practice.

I intend, in the course of the all too short time that I have, to make nine points of substance and then move to an exciting peroration. My hon. Friend will forgive me if I rattle through those points, but I hope they are relevant to him. Along the way, I will attempt to answer some of the particular issues that he raised. Next week—I know that you, Mr Chope, and the whole Chamber, are waiting with bated breath—we will publish our skills strategy, which will set out the direction we intend to take regarding the funding and management of skills. It will be radically different from the assumptions that have underpinned policy over recent years, and will challenge much of the orthodoxy upon which that policy was based.

Let me deal with one point at the very beginning. I have asked officials to look at the issue regarding certification, which my hon. Friend raised. I agree that it does not seem appropriate—it is anomalous to say the least. We will look at that closely and deal with it.

The young people whom my hon. Friend mentioned, and those whom I meet, have ambition. They want to get on with their lives, and they recognise that learning can help them make something of themselves and can make them objects of admiration and respect. By attaining skills through learning, people gain a sense of value and are recognised by others as having worth. We believe that and care about it, and we will adopt policies that will enable young people to gain that sense of value. The investment we make in young people is our gift to future generations.

I do not doubt that the previous Government cared about such matters too—no party in this place has a monopoly on wisdom, and certainly not on compassion. The matter is one that understandably generates strong sentiment, and sentiment is not something we should disregard in politics; we are not dull utilitarians, are we? None the less, there were real problems with past policy. Many millions have been spent on a bewildering succession of schemes, but to what effect? At the last count, some 874,000 young people between the ages of 16 and 24 —or about one in seven—were not in any form of education, training or work. For a nation that cares about fairness and opportunity and about its own future, that is simply unacceptable.

Let me move to my nine points. The first is that we will certainly take a close look at job clubs such as those in Banbury and Bicester. They are good examples of what can be achieved by local people using prudent public investment, drawing together industry, local government, community groups and charitable organisations. I have discussed the matter with my hon. Friend, and I know they are examples that can be followed. I have asked my officials to look at them to see what can be done to share that good practice.

The second point is again implicit in my hon. Friend’s analysis. We need a more holistic approach to the way we deal with the problem of such young people. It ranges from the circumstances at school and their prior attainment, to family circumstances and the particular physical or mental health issues they may face, to simple matters of confidence born of inadequate skills—a lack of confidence that is inevitable for those who have poor literacy and numeracy skills. However, it is not as simple as that—indeed, it is not simple at all—which is why we need the joined-up approach that I think has been lacking in the past.

Thirdly, we also need to link the issue closely to our benefit reforms. I am speaking to the Department for Work and Pensions about those matters, and I assure my hon. Friend that part of the discussion is about funding. He made a good point about such people carrying funding with them and therefore being attractive to learning providers. We are on the case, and we will look once again next week—I do not want to give away any secrets—at the principles of learning accounts and the part they can play in driving the system through learner choice and employer need. I am mindful of those who are moving from disengagement to engagement in those terms.

[Anne Marie Morris]

There is certainly an attraction to that approach. South Devon college, in my constituency, goes out on to the streets to where the NEETs are to find them. It is a win-win situation. I think we need to go out to get them rather than waiting for them to come to us, which is the point the Minister is making.

[Mr Hayes]

My failure to respond to that point has nothing to do with its salience but with the time I have available. I will certainly take the matter up with my hon. Friend; it is a well-made argument.

The fourth point is about careers guidance. We need, as my hon. Friend the Member for Banbury said, to give such people the right advice and guidance. We will be launching an all-age careers service, which I spoke about last week in Belfast. Those who are interested may have a copy of my speech; those who are very interested can have a signed copy.

The fifth point is that raised by the right hon. Member for Oxford East (Mr Smith) about pre-apprenticeship training. As others have said, it is about getting people to the point where they can enjoy more formal training by the skills they acquire early on. We need a continuum of training, and I am working on that, too. However, it has to be progressive. I have said to the DWP that the offer must be authentic in terms of training and skills, and progressive—it must lead to further learning that makes people more employable, and then takes them into work.

The sixth point is the need for early intervention. When dealing with such multi-faceted problems, we need to look at disadvantage; let us be frank about that. It means using the pupil premium, announced by the new Government, in the most imaginative, creative and productive way possible, and seeing how that can leverage real outcomes for people’s subsequent progress in learning and work.

My seventh point is that the Government made a big commitment in the comprehensive spending review not just on apprenticeships, about which I will say a little more in a moment, but on community learning. Adult and community learning was protected in the CSR. I am passionate about the fact that there are different routes into learning. Some of them are informal and others formal, but we must not take the view that there is only one ladder to climb. People will return to learning, and people with a poor history in their prior experience will need a gentle approach. Small, bite-sized chunks of learning, highly accessible, very attractive and often linked to practical competencies can often be the way forward. That is why we protected both the basic skills and the adult and community learning budgets in the CSR.

Eighthly, I have already mentioned apprenticeships. I do not want to trumpet the Government’s achievements in that respect. People are right: we will need to get employers involved, which is why we sent out tens of thousands of letters last week to small businesses to get them involved in an apprenticeship programme and to back the £250 million we have put in, with a view to creating not just 50,000, or 60,000 but 75,000 more apprenticeships, which is more apprenticeships than we have ever had in Britain.

Ninth and finally, we certainly need to give institutions more flexibility. We need to make the system more responsive to the needs of such young people, and generally. A more dynamic and responsive system, shaped around employer need and driven by learning choice, can deliver the skills the country needs, and it can also change lives by changing life chances.

As a result of the initiative of my hon. Friend the Member for Banbury in securing the debate, I have done three things. First, I have asked my Department to develop a cross-departmental strategy to deal with the NEETs problem. Secondly, I am looking at simplifying the funding process for accessing the right money to run community-led projects to address NEET issues. Finally, in particular, I have asked officials to see what we can learn from job clubs in north Oxfordshire.

The issue is about the value we place on individual lives, and the value we place, too, on social mobility, social justice and social cohesion. When each feels valued, all feel valued. It is about building the big society from the bottom up—a brighter Britain where lives are illuminated by the power of learning, and a bigger Britain where all have their chance to grow.

Question put and agreed to.