Postal Services Bill

Jonathan Edwards Excerpts

Wednesday 12th January 2011 Commons Chamber

[Bob Russell]

No, I have not, but I am sure that the Minister, whom I have not yet won over to my argument, will point out that the coalition Government are investing a substantial sum of money in the sub-post office network. That will happen irrespective of what happens to my new clause.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

May I help the hon. Gentleman? Over the weekend, Consumer Focus said that unless there is any progress on this agreement, up to 4,000 post offices could be closed. Does he agree with that assessment?

[Bob Russell]

I am not in a position to challenge research that other organisations have undertaken. If that is the case, based on the number of closures under the previous Government, I would probably lose at least a third of the remaining sub-post offices in my constituency, which I would not welcome. Indeed, I would be distraught if that happened as a result of the Bill, but I hope that the money that the coalition Government are placing into the network will mean that the losses will not be of that magnitude.

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[Chris Evans]

I will not be the postmaster, as I have enough on my plate as it is.

As I was saying, we seem to have enough of a problem getting people to become postmasters. If postmasters start losing a large amount of their business, how we will recruit people into these positions? Nobody becomes a postmaster in the hope of becoming a millionaire. Perhaps I am naive, but I believe that people become postmasters because they want to serve their community. They want to be part of their community and provide a service, but who in their right mind would want to be a postmaster when they are having their business taken away? That situation is a tragedy.

[Jonathan Edwards]

The hon. Gentleman will be aware that 71.3% of Welsh post offices are in rural areas, which compares with the UK average of 55%. Does he not therefore share my concern that if there is no long-term inter-business agreement, that will have a disproportionate effect on Wales?

[Chris Evans]

Yes, I agree with the hon. Gentleman completely. As a Welsh MP, I know that this Government have certainly hit our country hard. I well remember the posturing of some Members during the Second Reading debate. Many Government Members were boasting, patting themselves on the back and telling us what they had done to keep their post offices open when they were up against the wicked Labour Government. What will they do next time if this Bill goes through? Before they go into the Lobby, they should think hard. If they are faced with a post office closure in five or 10 years’ time, what will they say to their constituents? Are they going to say, “I didn’t think it through,” or “I followed my Government Whips”? That is what they are faced with at the moment. The hon. Member for Northampton South (Mr Binley) talked about people’s legs being cut from under them, and that is what the Bill will do to these Members politically—I am saying that as an Opposition Member.

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[Mr Davey]

I beg to move, That the Bill be now read the Third time.

We have had an excellent debate on the Bill, not just today but throughout its passage through the House. Hon. Members have rightly spent a lot of time scrutinising the detail of our proposals, but I would ask all of them to stand back and remember what we are trying to achieve. We are trying to preserve two great British institutions—the Royal Mail and the Post Office. As we heard from Richard Hooper in his reports, both to the previous Government and to this one, unless we take urgent action, the future of the universal postal service is at severe risk.

Letter volumes are declining faster than anyone predicted—15% in the past five years alone—and some estimates suggest that they could decline by up to another 40% over the next five years. Is Royal Mail yet ready for this most challenging of business trends? Without the Bill, I believe not, for despite some progress on modernisation, Royal Mail has not adapted sufficiently to that market decline. Unless we take action, that will only worsen and Royal Mail’s position will become even more precarious. Let all hon. Members be in no doubt: doing nothing is not an option.

The previous Government recognised that, for in many ways the Bill is similar to that which was put before the other place by the previous Government in 2009. The previous Business Secretary was aware of the need for urgency. He said:

“We cannot simply ignore these facts, or put our plans in a bottom drawer”.—[Official Report, House of Lords, 10 March 2009; Vol. 708, c. 1068.]

Unfortunately, the previous Government ended up ignoring the facts. As they oppose the Bill, I suggest that the Opposition ought to go back to that bottom drawer. If they look hard enough, they might find the bottle that they lost in 2009.

The present Government are aware of the urgency. That is why we have pressed ahead with the Bill so early in the Parliament. We will send to the other place a Bill that is significantly better than the previous Government’s 2009 Bill. It is better for employees of Royal Mail, with employee shares to give them a genuine stake in the future of the business. It is better for the Post Office, setting it free and creating the possibility for a mutual ownership model in the future. Above all, it is better for the universal postal service and Royal Mail, as our Bill takes a more flexible approach to regulation and is much better structured to attract the private investment that this business desperately needs.

The House should have no doubt about the overriding aim of the Bill. It is to protect the universal postal service. I do not believe it is possible to protect that in the public sector any longer—at least, not without ever-increasing levels of taxpayer subsidy, which even Lord Mandelson, as he doled out largesse in the run-up to the last election, would have baulked at.

Royal Mail needs to modernise. Its business is changing with the impact of the digital world. I am sure that I was not alone among hon. Members in paying a Christmas visit to local delivery offices in my constituency. Not only was I impressed by the hard work of Royal Mail employees, dealing with some of the worst weather conditions in living memory, but I was staggered by the huge increase in the volume and size of parcels. No one, none of the posties there, had seen anything like it.

In recent years, the volume of internet shopping has been increasing, especially items such as books and CDs, but now it seems that the British consumer’s confidence in internet shopping has grown dramatically. That is good news for the longer-term future of Royal Mail. Although the increase in parcels will not offset the decline in letter mail, and the parcels sector is intensively competitive, there is a chance—an opportunity —for Royal Mail to grow.

The other dramatic impression that one has after visiting Royal Mail sorting and delivery offices and then visiting similar sites elsewhere—as I did in Berlin, visiting a Deutsche Post sorting office—is the lack of capital investment in Royal Mail so that it can make the best of this opportunity. Since Deutsche Post shares were first sold in 2000, it has invested the equivalent of £11.7 billion and about half of that investment has gone on modernising its parcels and express business because it knows that that is the future for its organisation.

We need to give Royal Mail that sort of freedom to invest in the delivery businesses of the future. We need to ensure that it can access capital, not just for its immediate modernisation plans, but well into the future. I do not believe that if it remains constrained by Treasury borrowing, it could ever access the right amount of cash, with the commercial speed needed.

As we privatise, we are ensuring that the employees get a good deal. Our pension plans and our employee share plans must represent the best deal on offer to any large group of employees in the UK today. I am immensely proud that Liberal Democrats in government with our coalition partners are delivering the deal on pensions that Labour failed to deliver, and I am immensely proud of the strongest legislative commitment to employee shares in any major privatisation.

Given the time, although I want to say something about post offices, before doing so I shall comment on stamp design. The amendments passed by the House will ensure that Her Majesty’s head will appear on stamps in the future.

[Jonathan Edwards]

rose—

[Mr Davey]

Let me anticipate the hon. Gentleman, because the concerns that the nationalist parties expressed in their amendments are unfounded. The Bill will ensure that nationalist emblems can be placed, and be required to be placed, on stamps in future. I hope that he is reassured by that.