Universal Postal Service

John McDonnell Excerpts

Thursday 17th July 2014 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

My hon. Friend has come up with concrete proposals and a recommendation for Ofcom, but is not the problem that Ofcom has no sense of urgency at the moment? It says that it will not institute a review until the end of 2015 and that the 2011 legislation statutorily barred it from establishing a fund for five years, which means that it will not be able to do so until 2016, unless the Secretary of State acts. There is, therefore, a twin responsibility; on the Secretary of State to act in order to enable a discussion about the fund; and on Ofcom to institute the review now.

[Katy Clark]

There is a great deal of complacency on this issue from not only Ofcom, but the Government. We are seeing the warning signs now and we need the Government to make it very clear that we believe there is a real threat to the universal service. Ofcom needs to look at the matter urgently, carry out a full review and come up with proposals to ensure a level playing field in the postal services market and to protect the universal service.

--- Later in debate ---

[John McDonnell (Hayes and Harlington) (Lab)]

These debates are not good for my health. My doctor advises me to stop being so angry about these issues, but I cannot help but be angry about this. The hon. Member for Angus (Mr Weir) said that what we are discussing was predicted and therefore predictable. I was in the House 10 years ago when the European directive was debated. There were three Labour Members: me, my hon. Friend the Member for Islington North (Jeremy Corbyn) and, I believe, Tony Benn. The new Labour Government were then implementing the European directive with zeal, in advance of virtually every other country in Europe. They were putting our postal service out to privatisation in a way that, as was demonstrated even then in that debate, would eventually lead to the threat to the delivery service. It was inevitable.

Thank goodness that we now have my hon. Friend the Member for North Ayrshire and Arran (Katy Clark). The irony 10 years ago was that the former general secretary of the union was then a Minister pushing the legislation through. The Communication Workers Union-associated Members had disappeared that evening; only a limited number of us were here, fighting and arguing in favour of amendments. It was late at night and I remember it well.

We said that the changes would inevitably result in, first, a threat to the postal service and, secondly, in the full privatisation of the Royal Mail. That has happened. It has been done in such a way that we have lost billions as well. This is why I get so angry—what we have done to the postal service in this country is absolute insanity. I remember well the argument put up then: that we could no longer subsidise Royal Mail. But I am subsidising—we are all subsidising—TNT and others now. They do not pay a living wage, so we are subsiding most of their workers through working tax credits and other benefits. That is the irony.

What worries me now is that I believe we are at the tipping point. I repeat what the hon. Member for Angus said: if we do not do something soon, it might well be too late. That is why if we do not act very quickly, we might go past the tipping point and lose it, given the time scales and how slowly Ofcom works. My worry is that Ofcom says it monitors what is happening at the moment and does not feel it needs to act at this time, yet it never defines publicly what the tipping point is. Ofcom does not share information that would demonstrate whether the service is under threat or not.

I listen to the real experts—those whom everyone has cited today and praised to high heaven. They are the people who deliver the mail. They know what is happening on the ground, how they are being undercut by TNT and others and what their prospects are—in the near future, not just the long term. They are saying through their trade union and in direct dialogue that, if we do not act soon, we will lose the universal service.

There is now an onus on the Government to bring Ofcom in and start immediately on two processes. First, there should be an immediate public review. I would welcome it if the Minister went back to the Secretary of State to say that we need to bring Ofcom in now. I would welcome a public meeting involving Ofcom, us and the Minister so that we had full openness and transparency about the monitoring it is undertaking and how it defines where the tipping point will be. What time scale is it working to?

The second issue, raised by my hon. Friend the Member for North Ayrshire and Arran, is about the support fund. As has been said, the legislation barred any action for five years unless the Secretary of State intervened. We have all said it now: we know that the five-year period is too long because we may well miss the boat if the Secretary of State does not intervene now. Government action is a matter of urgency. I think there would be cross-party support on these two measures. First of all, we should bring in Ofcom to define where it is at in the analysis of the tipping point of the threat; and secondly, we should start the work on the support fund now. I say that because, as other Members have said, it will take a while to put in place, so we should at least start the work now so that if it is needed, it is readily available. If it is not, fair enough; it does not have to be enacted in its final form, but let us at least get the work undertaken now. Otherwise, we will all regret that we did not act sooner.

The onus, I am afraid, is on the Government. I say that not in a partisan or critical way because I believe I reflect the views of the whole House across the parties in saying that the Government must feel a sense of urgency. Otherwise, we will lose the service that every Member has praised. If that happens, we will be not only letting down the work force of the Royal Mail, but betraying our own constituents as well.