Performance of Royal Mail

Meg Hillier Excerpts

Monday 26th October 2026 Commons Chamber

[Darren Jones (Bristol North West) (Lab)]

I thank my hon. Friends the Members for Redditch (Chris Bloore) and for Lichfield (Dave Robertson) and others for securing this important debate. It is a pleasure to speak in it, but I am disappointed we are having to discuss this topic yet again, because we have been here before: the owners of Royal Mail prioritising profits over the public service requirements of the business they bought; the regulator seemingly unable to do anything at all about it; and postal workers once again being treated so badly when they are the ones who go out on the frontline day in, day out. The question we therefore need to answer is: why?

During my time as Chair of the Business and Trade Committee in the previous Parliament, I spent days and days of parliamentary time cross-examining Royal Mail bosses, the then Government and the regulator. I sought to give a voice to postal workers who, more often than not, felt voiceless in the workplace, and I was proud to support the efforts of the Communication Workers Union to give its members more strength in the power games that were being played between management and the workforce, but quite frankly, what good did that do? The then chief executive was asked to move on, albeit with a handsome exit payment, a new owner has taken over the business, and the regulator conducted its reviews, issued its fines and changed the universal service obligation, yet we find ourselves here in Parliament discussing the issue once again. The only conclusion I can draw is that the business model is not fit for purpose. We should not be shy in coming forward to say that the privatisation of the Royal Mail and its separation from the Post Office was a mistake. The coalition Government got that wrong, and I hope that this Labour Government will put that right.

As far as I can see, there are only two real options. The first is to facilitate the end of the public service provided by the Royal Mail, and to let the current owners turn it into a truly profitable business. We should not be surprised that the new owners of Royal Mail want to make the business profitable, and to focus on its profit-making services—that is the business they are in. However, the problem with privatisation of a public service is that profit making comes first. So it falls to us, as the guardians of public services in this country, to decide whether we will protect the public service functions of the Royal Mail or not.

Some might say the issue is not that binary. No doubt regulation of the parcels market to ensure fairer competition would go a long way to help, and the Government should ask the Competition and Markets Authority to conduct a market investigation into parcel deliveries irrespective of what happens next to the Royal Mail. However, the House should be clear-eyed about what it will mean if we continue with the privatised model. It will, in the end, be the end of the universal service obligation as we know it. That is important because, as we have already heard, the universal service obligation is not just about delivering letters: it is about having a human connection with the people of this country, at every doorstep of every house, in every community, across the width and breadth of the nation. The covid pandemic showed why the network of postal workers matters so much, and I believe that will become more, not less, important in the future. To those making an economic case about the drop in letter deliveries being the end of the universal service obligation, let me say this: think carefully about the end of this public service, because once it is gone, it will not come back.

That takes me to the second option. If Ministers agree with me that privatisation of the Royal Mail was a failure, the only other real option is to renationalise it. The House may be surprised to hear me, of all people, say that—I am not a natural fan of the Government borrowing yet more money to nationalise businesses that can be effectively run by the private sector. However, it has been proven that the Royal Mail is an example of a business that cannot be run effectively by the private sector, and an example of a business that I believe the Government can renationalise fairly easily within its fiscal rules.

When the former Chancellor of the Exchequer, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), updated the fiscal rules in 2024, the debt definition became public sector net financial liabilities, or “persnuffle” among friends. That allowed the Government to borrow money to invest in assets while maintaining the debt rule target that Government debt should fall in the long term as a share of GDP. In practice, that allows the Government to use so-called financial transactions to pay for equity or debt financing of publicly owned assets. That could be done with the Royal Mail, and it would fall outside the fiscal rules.

That merely leaves the question of how to raise the money to do so. I am very conscious that our national debt has risen to above £3 trillion, and that the cost of that debt is expensive to the taxpayer, costing over £100 billion a year in interest payments alone, but I think there is a way through that Ministers should consider. When the current owners of Royal Mail, International Distribution Services, bought the Royal Mail in 2025, the deal was valued at £3.6 billion. We should therefore use that number for the purposes of today’s debate.

In the spending review that I conducted in 2025, we allocated £23.8 billion for financial transactions alone between 2025-26 and 2029-30, and we are told to expect the Chancellor to increase that budget further this week. However, financial transactions can only be used by Departments to finance deals where there is a suitable public financial institution—or “puFins”—and where the Office for National Statistics agrees that it is a genuine financial transaction, not an attempt to redesign normal Government spending so that it falls outside the fiscal rules. We have several well-established puFins, from the National Wealth Fund to the British Business Bank, which I am sure will spend their budgets well. The Government have also committed to establishing several new ones, some of which have yet to be fully established. In short, it is quite hard to spend the financial transactions capital budget and I therefore assume, with some confidence, that there will be underspends that could be reprioritised.

Finally, if that is not convincing enough, I am certain that there will be public interest in a more mutual form of ownership of the Royal Mail and, I would hope, its reintegration with the Post Office. A public share offering and a special scheme for Royal Mail employees could be a nice way to do that, with the Government merely underwriting the risk, while funds are raised by the public in the years it would take to undertake the action. Having looked at this issue for so many years, I believe that this is the only solution to protecting the Royal Mail and its future.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Even if my right hon. Friend’s suggestion were to come to fruition, there would still be ongoing running costs. We know there is huge competition in this sector, so how would he propose to deal with that? Is he proposing an ongoing subsidy?

[Darren Jones]

I refer my hon. Friend to my previous comments about how the market needs to be better regulated, whether we own the Royal Mail or someone else does. That is why that work should be undertaken while a debate on ownership may continue with Government.

I believe that the end goal that we all want to see, that our constituents want to see and that the Government have the capacity and the ability to enable is a Royal Mail that is back in public hands, reintegrated with the Post Office network. That would be a tangible example of change in every postcode. I put that option on the table today for the Government to consider. I hope that Ministers will come to the same conclusion that I have and get on with doing the right thing.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

I thank the hon. Members for Lichfield (Dave Robertson) and for Redditch (Chris Bloore) for initiating the debate, and, in particular, I thank the right hon. Member for Bristol North West (Darren Jones) for his incredibly thoughtful speech. I am not going to get political about this, but our position for ages has been that we should renationalise Royal Mail.

When I read that Royal Mail would be delivering second-class mail only every second weekday, I misread it as, “Royal Mail will be delivering second-class mail every second weekend.” I thought, “Oh, thank goodness! My constituents in Bridge of Don will be getting a better service than the one that they currently receive,” because every second weekend would be significantly better than what they are getting now.

I have visited the delivery offices in my constituency. There is Bridge of Don, there is Mastrick and there is Kittybrewster. I think there is a benefit in living in Scotland in this regard, because the central comms people do not come to these meetings, so I get honesty from the posties. I am wondering what happens when I send a letter, or rather an email, to Royal Mail—there is no point in sending a letter—saying, “Mrs Goggins is having an issue with her mail delivery. She lives in Bridge of Don. Here is her address.” Does Royal Mail Central actually contact the delivery office and say, “Mrs Goggins is having a problem. Please reply and let us know what is happening”? Or does Royal Mail just send me an email back saying, “Everything is fine, it is all great, don't worry,” without actually speaking to the delivery office?

The hon. Member for Lichfield talked about not having all the answers. Well, I will tell the House who has most of the answers: the posties. The posties know what changes need to be made. I went to one of my local delivery offices, and the staff were talking about the design of the cages and the design of the routes. They had asked Royal Mail whether they could change some of the routes and cages. Royal Mail took months to get back to them, but it turned out that they were not allowed to change the design of the cages—they were dangerous, with things falling off them—without the say-so of Royal Mail. It is an incredibly top-down organisation. The posties know how to fix this. The posties know how to improve their routes. They are making these cases to Royal Mail Central, who come back to them with, “I know that that street is off this street, but we are going to keep it on the other route, just because we are in charge and it may look quite good on Google Maps.” I do not understand why Royal Mail is not listening to the posties, who know exactly what they are doing and who know how to improve the routes.

As hon. Members have said, the issue is that Royal Mail’s leadership are trying to asset strip the organisation. It feels like they are not trying to improve the service. They do not care about improving the service; they just care about improving profits. We have been fighting on behalf of our constituents, but we have also been fighting on behalf of the posties, who are not being listened to and who feel like they are banging their heads against a brick wall.

It is not just about NHS letters, although one constituent got in touch to say that they had not received any mail between 23 September and 14 October. They got nine letters, seven of which were NHS letters, and they have been put at the bottom of a waiting list because they missed their appointment. I can tell which letters are NHS letters when they come through my door or when I see them at the sorting office. I know which ones they are, as do the posties, but they are not allowed to take them out and ensure that they are being put at the top of the priority list.

[Dame Meg Hillier]

NHS letters have come up a lot, and we are letting Royal Mail off the hook if we say that it is okay to prioritise them. That is a workaround for a failed service, and many other letters are important but, for various reasons, will not be branded. Benefits letters, for example, are often anonymous, and sometimes even health letters can be private. Does the hon. Lady have anything to say about that?

[Kirsty Blackman]

The workaround on barcodes, for example, works only in some areas, and some of the health boards cannot use that workaround. It is absolutely a workaround; it does not ensure that we have a universal service obligation or that the postal service, which people rely on, is actually working.

I do not know about the offices of other MPs, but my office often needs to get people’s wet signatures. Organisations such as UK Visas and Immigration or local councils will require us to get someone to sign a form, and many times we have posted that form to people but they have not got it. What are we supposed to do if people do not have a printer at home? A lot of people do not, understandably. If somebody, particularly in the Bridge of Don, does not have a printer at home and we post them a form, they will not get the letter. How can they get a democratic service, or get us to raise a complaint with the city council on their behalf, if they are not getting the letter?

We have had too many by-elections this year, and a number of people in Aberdeen told us that they did not get their postal votes—they did not arrive. In a council by-election, it is hard enough to get people to vote, but when someone does not get their postal vote, they just say, “I won’t bother.” People are missing out on the democratic process because of the failure of Royal Mail, which cannot even prioritise those letters. I do not understand how Royal Mail can repeatedly say to each one of us, “Everything is fine,” or “We’re working on improvements,” when this is an absolute disaster.

The post is a lifeline. It is a really important public service, and we need Royal Mail and Ofcom to step up, but we need the Government to put on as much pressure as possible to ensure they do.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I could list all the issues that my constituents have raised about this issue, but we would be here all night. I concur with a lot of other Members, and I will give some examples.

We have a shortage of posties, so I am doing what I can to encourage young people to join the postal service, but clearly I am not going to solve that problem on my own. When I met Royal Mail’s leadership, they said to me, “Don’t worry—in one week, you’ll get a Monday, Wednesday and Friday delivery, and the next week it’s a Tuesday and Thursday delivery,” as though that is somehow okay. That is how the system operates in theory, but a constituent applied for a 60+ oyster card that took so long to arrive that they had to buy a monthly pass, costing over £200, while they were waiting. One constituent received divorce papers weeks late, and five constituents reported not receiving their postal vote for a recent by-election. Exactly as colleagues have said, people are just not bothering to vote because the postal vote is so inefficient.

As a canvasser, I panic when I ask someone whether they have voted and they have not posted it yet. If there is only a week to go, I get worried about them putting it in the post. I will start explaining how to go to the polling station to deliver it, and I will see immediately that they lose interest, even if they were going to be around on election day. One constituent nearly lost her home because of delays with their pension administrator sending information backwards and forwards. Letters were not received, and she experienced many delays in getting her pension in place.

I will give a couple of local examples. In Hackney Wick, post was delivered on 23 June, 27 June, 1 July and 9 July, and then nothing until mid-August. In Dalston in my constituency, one resident did not receive any post for three months, and another road had no post for eight days. I could go on with such examples.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

As a London MP, my hon. Friend is describing the experience of my constituents as well. When I go to Royal Mail to try to interrogate its poor performance, it is required only to give performance data on the basis of the first part of the postcode, so poor performance in SE24 is disguised by average figures for the SE postcode area. Does she agree that it would be a step forward in Royal Mail’s accountability if it had to report performance on the delivery office area, rather than the whole district postcode area?

[Dame Meg Hillier]

My hon. Friend saves me from having to repeat exactly the same point. We can all name roads in our constituencies that are not getting post, yet apparently it is being delivered in the wider area. There is one way we can all get our post. Guess what? If someone has a parcel delivered, their post will be delivered the same day, so it is more cost effective for some of us to get small, cheap things delivered and then suddenly receive our mail.

There is a bigger issue: the competitiveness of Royal Mail. Since the new owners took over, they have clearly been chasing the competitive parcel delivery market. We understand that how that would interact with Royal Mail was always going to be a challenge, but they seem to have completely junked the letter service. Other providers, some of which have been named, will send parcels. We can even email them our content, and they can mail merge it and put it in an envelope. Of course, in the end the Royal Mail delivers the last part, but we can do that at a discounted postal rate. The leadership at Royal Mail, which has a universal service obligation and the responsibility for delivering letters during the last stage of the journey, are not thinking ahead of the curve about how they could compete with the companies that are undercutting them. That seems utterly ridiculous.

I turn to the postal staff, because I have a number of constituents who are reluctant to raise their concerns. They want to raise them with me, but they say that they do not want to make a complaint because they like their postie. Who does not trust their postal worker? It is one of the most trusted professions. David Beckham, members of the royal family—although perhaps they do not get their mail delivered directly to their door—and top celebrities all trust our postal workers to deliver our post, and I have no doubt in my mind about their trustworthiness. This is a group of people who take huge pride in their jobs, and as we heard from the hon. Member for Aberdeen North (Kirsty Blackman), very often postal workers can tell us what the solutions are. Over the years I have interacted with Royal Mail, mostly in London for the past 25 years or so. Often the solution is described locally but not delivered by the central office. The new ownership are degrading our letter service, and if we are not careful, we will go down the path of the Danish service. We cannot lose this service.

There is a big challenge for the Minister. It is easy to talk about nationalisation, but that costs money. It could be that the leadership want to run themselves down so much that the Government step in, but we should not let Royal Mail off the hook. We need solutions, and we need them now.