Postal Services Bill

Julian Sturdy Excerpts

Wednesday 27th October 2010 Commons Chamber

[Julian Sturdy (York Outer) (Con)]

Before us today is a truly national piece of legislation. Our postal service is a cornerstone of British life. It is a frequent source of frustration for many, alongside the weather and—particularly on this side of the House—the BBC, but it is also a traditional source of reassurance. Remarkably, a postal service was first made available to the general public back in 1635 when Charles I was on the throne. Over the years, it has evolved and adapted, albeit slightly slowly at times, but even today people up and down the country still depend heavily on our postal services. That is particularly the case in rural areas, including many of the villages in my constituency. Local post offices are often the commercial bedrock of such villages, the sole shop in the area and a gateway for correspondence to reach any destination in any part of the world. They are also a lifeline for elderly residents.

In the past, the closure of post offices has caused real problems for local communities, which often launch proactive campaigns to retain their vital services. We have already heard about many such campaigns in the debate today. Indeed, before being elected to Parliament earlier this year, I had visited Westminster on only one previous occasion. I was a parliamentary candidate delivering a petition to No. 10 Downing street with residents from Fulford, as part of our campaign to save our local post office. Sadly, our noble attempts failed, but I saw at first hand how passionate local residents can be about their local services, particularly the post office. I also saw the impact that such losses can have on a community.

So, let the first premise of today’s debate be that the country still values and depends on local post offices. Acknowledging that fact should not, however, make us averse to the reform that our postal service so badly requires. On the contrary; our desire to protect the Post Office should result in greater determination to reform and indeed privatise Royal Mail. By reforming the latter, we will be protecting the former. It is on that basis that I broadly support the Bill.

As with all difficult pieces of legislation, it is important to remember why we are here. Royal Mail’s financial health continues to worsen, with its market share declining. The pension deficit is more than £10.3 billion, and the regulatory regime is not fit for purpose. Royal Mail is not sustainable in its present format, and would eventually fail completely if the status quo were allowed to continue unchecked. These were the conclusions of Richard Hooper’s 2008 Government-backed review into our postal services. Richard Hooper has also recently commented on the unnecessary 20-month delay that resulted from Labour’s ditched reform plans. In his opinion, the situation has got worse, and doing nothing is simply not a tenable option. Once again, real action is required, and once again, it takes this Government to lead the way.

By opening up Royal Mail to private investment, the Government will relieve the organisation of its enormous and historic pension deficit, and at least 10% of shares will go to Royal Mail employees. Attracting an injection of private capital into Royal Mail will end the dependence on funding from the taxpayer. New commercial disciplines will be introduced to the business, alongside a new businesslike culture that is driven, focused and capable of delivering the very best service to the public. Privatising Royal Mail will, in essence, secure its long-term future. At the same time, this privatisation ensures that Post Office Ltd is not for sale and that the 11,500 post office branches across the UK will remain in public ownership. Despite what has been said by Labour Members, there will be no further programme of closures, although such a programme frequently occurred under the previous Administration.

Despite my general enthusiasm for the Bill thus far, I would like to raise one specific point of concern: the future of sorting offices. Unlike post office branches, sorting offices are, of course, operated by the Royal Mail. I have already touched on the local importance of our universal postal service and the role that post offices play in our local economies. The same principle can be applied to sorting offices, so I urge the Government to highlight the importance of retaining sorting offices—at least in every major UK city, such as my own of York—in any negotiations with private investors. I strongly believe in the Government’s localism agenda and any attempts to maintain at least city-based sorting offices would, in my view, be welcomed in our northern and rural economies, where such offices often employ many and play an important role in the efficient delivery of postal services.

In summary, the universal postal service remains a traditional, well respected and relevant part of our national life, but to allow the status quo to continue, out of some nostalgic fantasy, would be devastating in the long run. The reforms in the Bill strike the necessary balance—taking action to control the pension deficit, further modernising our postal services, providing an exceptional employee share scheme and, most importantly, ensuring the survival of post office branches across the country.