Performance of Royal Mail

Debate between Meg Hillier and Darren Jones

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.

Government Performance against Fiscal Rules

Debate between Meg Hillier and Darren Jones

Monday 7th July 2025 Commons Chamber

[Darren Jones]

I think the House knows what losing control of the public finances looked like, because under the previous Conservative Government interest rates went through the roof, families were paying higher mortgage rates and the Chair of the Treasury Committee was calling out the irresponsible behaviour of Liz Truss and her Ministers in the Treasury. That is what losing control of the public finances looked like and that is why the Conservative party lost control of Government and is in opposition today. The right hon. Gentleman asked me to comment on forecasts of annually managed expenditure and on future tax decisions. He knows how this works. All of that will happen with a forecast and a Budget, which will happen in the autumn.

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

We all know why the Government want to keep their fiscal rules tight, because we know what happens when the markets go wrong, but a lot of things have rocked the country since the Labour Government were elected a year ago. Will the Chief Secretary explain to our constituents what the benefits of the fiscal rules are for them in their day-to-day lives? This can seem a very remote and distant discussion for people who are living in overcrowded conditions or who need healthcare, for example.

[Darren Jones]

I thank the Chair of the Treasury Committee for her question. The way I would describe it to the public is that when the Government lose control of the public finances, as the Conservative party did in government, it affects not only the accounts in the Exchequer and the Treasury but the family finances in every house across the country. People are still paying for the consequences of the last Government not sticking to their fiscal rules and acting irresponsibly. That is why our fiscal rules are non-negotiable, and we will stick to them.

Regional Growth

Debate between Meg Hillier and Darren Jones

Wednesday 4th June 2025 Commons Chamber

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

I warmly welcome this investment in Britain, and I hope that the Treasury will be fully evaluating the impact of this vital transport infrastructure on growth in regions, which we know has always lagged, except for in London and the south-east. Although these figures are fully funded now, with all the global shocks we are seeing, it is important that we are aware that there could be additional costs on some of the raw materials being used, and any delay obviously adds costs too. Will the Chief Secretary tell the House the Government’s plans if costs do go higher—will the figures be fully funded regardless, or will they have to go back to the drawing board if there are challenges?

[Darren Jones]

My hon. Friend the Chair of the Treasury Committee rightly alludes to the fact that the Chancellor’s speech today makes the case for this Government investing in every part of the country and ensuring that growth is felt widely. My hon. Friend asks me about the supply chain and costs for building infrastructure. The House will know that Britain has unfortunately become a country where most of our infrastructure projects go over time and over budget as a failure of poor industrial and infrastructure policy and erratic decision making over many, many years. Alongside the spending review, we will be publishing the infrastructure strategy, at a slightly later stage, and that will answer many of my hon. Friend’s questions on Government policy, recognising the problem she has raised and the solutions that will be set out to support the supply chain to be able to deliver for Britain.

Oral Answers to Questions

Debate between Meg Hillier and Darren Jones

Tuesday 4th March 2025 Commons Chamber

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

It is right that the Government have put more money into defence. However, in answer to a previous question, the Chief Secretary to the Treasury said that there is an impact assessment of the overseas development budget. Does that mean that it is still in scope of the spending review and that there could be changes to that budget in June?

[Darren Jones]

Just to clarify, I did not say there was an impact assessment; I said that the impact of the changes is being considered by the Government, but we will set out the detail on that in due course.

Growing the UK Economy

Debate between Meg Hillier and Darren Jones

Wednesday 29th January 2025 Commons Chamber

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

I welcome this Government’s commitment to infrastructure investment and to telling the world that Britain is open for business, but to achieve all of this, we will need a really skilled workforce to deliver on those major construction projects. May I ask my right hon. Friend to set out how the Government will ensure that we have the skills to deliver what he has promised?

[Darren Jones]

I thank the Chair of the Treasury Committee for her question. This is an important test of turning policy into real-world delivery. Through our infrastructure and industrial strategies, we are engaging right now with businesses and investors across the country so that as we bring forward our plans, we have a skills and training system that creates opportunities for people to take up the jobs that we need them to do in order to help get Britain building. That will be a crucial part of our approach to infrastructure, so that every person across the country can seize the benefits of this Government’s plans.

Public Finances: Borrowing Costs

Debate between Meg Hillier and Darren Jones

Thursday 9th January 2025 Commons Chamber

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

We all know that fiscal rules and certainty are vital for the markets and the good stewardship of the public finances, so will the Chief Secretary to the Treasury explain what process he will be going through as he conducts the spending review, and what notice he will give to Departments about extra cuts that they may have to make in order to meet the fiscal rules? In addition, when the Chancellor comes in front of the House for the OBR forecast in March, will she be making a fiscal statement at that point?

[Darren Jones]

I thank the Chair of the Select Committee for her question. As the House knows, we have started the second phase of the spending review, to set public sector budgets from 2026-27 onwards. The Chancellor confirmed in a written ministerial statement before the House rose for Christmas that there will be a forecast from the OBR and a statement on 26 March. As I said in my response, that will be the next time the OBR will give a view about the UK economy and the levels of funding for public services. Between the OBR forecast in March and the conclusion of the spending review in June, the House will be updated in the normal way.

Fiscal Rules

Debate between Meg Hillier and Darren Jones

Monday 28th October 2024 Commons Chamber

[Darren Jones]

I am very fond of the hon. Gentleman, but he has some brass neck to stand up in this House and tell this Government how to behave after his party’s maladministration over the last 14 years. May I politely point out that he might be getting slightly ahead of himself? The Chancellor has not set out the detail of the fiscal rules in advance of the Budget; she will do it in this House, in the Budget on Wednesday, and I encourage him to wait for that information. He painted a picture of the country performing so well under his party’s leadership, but he may want to reflect on why he lost the last election so badly.

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

As Chair of the Treasury Committee, which has responsibility for scrutinising the Budget, I find the timing of this statement a bit frustrating, as we will have questions that presumably cannot be answered until Wednesday. Will the Chief Secretary explain how the guardrails will work? There is the national infrastructure and service transformation authority, the office for value for money and the National Audit Office. What role will each play in reassuring the markets, so that an autumn “sniffle”—that is PSNFL, or public sector net financial liabilities—does not become a winter cold?

[Darren Jones]

I know that the Chancellor looks forward to giving evidence to the Treasury Committee following the Budget in the normal way. To answer the question, the national infrastructure strategy will, for the first time, bring together all the infrastructure and major project asks of Whitehall Departments into one place alongside the economic infrastructure assessments. This will inform the multi-year spending reviews, which will now overlap, so that when an election comes up, we do not again end up with a Government making no spending plans whatsoever, or announcing a load of projects when there is no money to pay for them. We are confident that this better approach to allocating capital will mean that investment under this Government will improve the productivity of our public services and the growth of our economy, and mean a better return for British taxpayers across the country.