Michael McCann
Main Page: Michael McCann (Labour - East Kilbride, Strathaven and Lesmahagow)(11 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
I congratulate my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) on securing this debate. I wish, like others, to contribute because a large part of my constituency covers a rural area. I have two rural post offices out of a total of eight across the constituency, which is the lowest number of post offices of any Scottish constituency aside from Glasgow North and one of the lowest in the UK as a whole.
The post is a vital service in rural areas. It goes beyond merely putting mail through the letterbox. For example, people who are not naturally gifted at form-filling can get help at competitive prices from the post office on a range of official documents, including passports, driving licences and tax discs. The post office will check the photo and form for a new driving licence for £4.50; by contrast, private companies offering similar services online can charge up to £60 for passport checking. The difference is between a public service at a modest cost and the free market charging whatever it thinks it can get away with.
When public services began to be privatised back in the 1980s, the mantra from many who occupied the Government Benches at the time was that competition meant a better deal for the customer. However, let us look at some recent examples. The privatised Thames Water makes profits of billions of pounds but surcharges Londoners for upgrading the sewer infrastructure in the city. The energy companies, including British Gas, have put household fuel and electricity costs up to an unacceptable level in recent years—not something they are keen to tell Sid about. The railway companies are allowed to get away with above-inflation fare increases when passengers have to tighten their belts and suffer a drop in their incomes. There cannot be many people left apart from some on the Government Benches who believe that privatisation always means a better deal for the general public.
Mr Reid
The hon. Gentleman is right to criticise the private energy companies, but Royal Mail has been guilty of excessive price increases. Royal Mail, which is under public control, put the price of a stamp up from 36p to 50p last year. Both public and private organisations are equally guilty.
Mr McCann
Yes, but under Royal Mail, we maintain the concept of universal delivery. As the hon. Gentleman has made clear, Royal Mail is profitable—it is earning the country money—which is why, instead of a having a one-off pre-election bonus through the sale of services, the UK should enjoy a regular income from post office services throughout the country.
If privatisation is the trend, will there be other royal privatisations? Can we look forward to the McDonald’s civil list, the Starbucks Duchess of Cambridge, or the Mitchells and Butlers Windsor castle? After all, the latter company already has hundreds of Windsor Castles, so it would only be a consolidation of the brand.
I have said those things in jest, but there is a serious point. A line must be drawn on how far privatisation is allowed to go. Everyone, including the Government, agrees that some things simply cannot be put up for sale. Honours such as peerages fall into that category. Parliamentary seats are legally immune from sale. The Prime Minister’s dinner table ought also to be exempt, although there are reports that donations to one Government party can get people through that front door. The argument is about whether or not postal services are a proper candidate for selling off. I and many other right hon. and hon. Members do not believe that the case has been made. Perhaps it is worth looking at the debate from the other side.
Recent complaints from the head of Royal Mail, Moya Greene, about remuneration for higher executives in the service, suggest that one priority for a privatised postal service will be significantly better pay for those in senior management positions. I am sure that Moya is still smarting from having to agree to hand back the £250,000 she received to get on the UK housing ladder, on top of the £127,000 she receives annually in relocation payments. Marie Antoinette’s riposte, “Let them eat cake” comes to mind. Are those sorts of increases really what the country wants to see—and pay for—at a time when most families have suffered a drop in income as a result of the economic climate?
The evidence does not back up the case for selling off postal services, so what is the real reason behind the Government’s enthusiasm for these projects?
Lady Hermon
I preface my remarks by saying that I do not want the hon. Gentleman to breach confidentiality, but it would provide a helpful contrast to the pay, salary and bonus of the chief executive if he could give us some idea of the income of the sub-postmasters in the post offices in his constituency.
Mr McCann
I am grateful for that intervention, but unlike our salaries, which are publicly available, I do not know the salaries of individual sub-postmasters and sub-postmistresses in my constituency. However, I think we can say that their salaries will be a fraction of the money paid to the chief executive, who appears to be willing to increase the salaries of higher executives under Royal Mail privatisation plans.
The evidence does not back up the case for selling off postal services, so we must ask what is the real reason for this project. For most of those on the Government Benches it is surely a dogmatic belief that, whatever the evidence, private is good and public is bad. I anticipate that the argument that postal services do not really have the same status in this technological age as they may have had in the past may come up. We will be told that people have the alternative of going online or using e-mail, and so do not have to rely on postal services. However, my recent experiences in Blackwood, Kirkmuir Hill and other rural areas in my constituency suggest that that is a rash assumption. British Telecom and the Scottish Government, supported by the UK Government, are rolling out programmes for so-called superfast broadband. In rural Blackwood and Kirkmuir Hill, however, a part of the community—a new development—has been left out due to the rather bizarre claim that they could not be sure of demand. Those constituents may get new broadband speeds in three, four, five or six years’ time, so they cannot rely on the internet and e-mail to conduct their business now. They have to resort to more traditional means.
That clearly demonstrates that communities in rural areas, where it is most expensive and difficult to upgrade online services, are the most likely to have to rely on postal services for the longest time. Yet if postal services are deemed to be too expensive, it will be in those areas that services are most likely to be jettisoned by private sector companies as uneconomical. That has certainly been the experience in New Zealand. In the UK, the number of rural post offices has been cut by 2,765 since 2000. I acknowledge that that cut is less than the cut to the number of urban post offices in the same period, but the accessibility criteria I mentioned earlier mean it is more significant, as rural offices are much further apart. Rural areas suffer in the provision of traditional Royal Mail and Post Office services and in the technological revolution from which urbanised areas will be able to benefit more or less immediately.
There are, of course, questions about access to services for those who do not own cars and have to get to urban centres, where postal services are more profitable and more likely to remain. A recent Library note shows that the accessibility criteria already differ between urban and rural areas, with urban post offices expected to be within 1 mile of the customer, but up to 3 miles away in rural areas. There are bus services from rural areas—my constituency is no different in that respect—but they are by no means as frequent as those that urban users are familiar with. That self-evidently reduces access, compared with being able to walk up the road to a local post office facility in one’s own village.
Then there is the question of whether the public want postal services to be sold off. The evidence from my postbag is that many people are deeply concerned about the proposals and have shown support for the Communication Workers Union campaign. I, too, would like to mention Hugh Gaffney, who has been a regular correspondent and has worked tirelessly on behalf of his union members in my constituency. However, nobody has written to me to say that the sell-off is a good thing and should go ahead. I cannot find any reference to a Royal Mail sell-off in the 2010 Conservative or Lib Dem manifestos, so there can be no claim of an electoral mandate for the proposal.
In the face of public hostility to the idea and the lack of a clear mandate, surely the Government should reconsider their proposals and withdraw them. At the very least, they should defer the issue until after the 2015 election and put it in their parties’ manifestos to ensure that, before any decision is taken, there is a clear and proper mandate for such a potentially far-reaching act, because once services in rural areas have gone, there will be little chance of their returning and our country will be a poorer place for it.
Jo Swinson
The hon. Gentleman is obviously an avid reader of the Liberal Democrat manifesto, perhaps unlike his hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann)—
Jo Swinson
If the hon. Member for East Kilbride, Strathaven and Lesmahagow will let me finish the sentence first, he may be fortunate and I may be able to give way to him.
Indeed, we recognised in the Liberal Democrat manifesto that Royal Mail would need an injection of private capital. Clearly, in the current plans at least 10% is guaranteed as worker shares. That is right and, importantly, it is set down in the Postal Services Act 2011. Obviously, the shape and format of the present proposals is not a carbon copy of what was in the manifesto. We are three years on from then and we are working within a coalition Government.
Mr McCann
May I remind the Minister that the Liberal Democrat manifesto committed also to full public ownership of the post office network? Can she explain how that sits with selling off the Crown post office network through franchising and with the Government’s plans to sell off most of Royal Mail, whereas the manifesto specified only 49%?
Jo Swinson
It is very important to make the point that the post office network remains in public hands. We need to get it on to a sustainable footing. I should have thought the hon. Gentleman welcomed that. The opportunity to mutualise the post office network ought to be welcomed not just on the Liberal Democrat and Conservative Benches, but on the Labour Benches, as it will ensure that ownership of such an organisation is more widely available to stakeholders within it, including not just sub-postmasters, but customers and others. That mutualisation process is an important part of the future of the Post Office.
The hon. Gentleman mentions the Crown network. In our post office network of almost 12,000 branches, the vast majority of which, as has been outlined eloquently by many speakers in the debate today, are small sub-post offices. About 370 are Crown post offices in the busiest high streets and town centres. For those 373 offices to be losing more than £40 million a year, as they were when this Government came into office, is unsustainable. I hope the hon. Gentleman will recognise, therefore, that getting the Crown network as well as the rest of the post office network on to a sustainable footing is essential to the future success of the Post Office.
Jo Swinson
I am making the point clearly that the Government remain the key shareholder in Post Office Ltd and therefore accept that the Post Office is in public hands. I concede that we are suggesting that when it becomes financially sustainable it would be a positive future if the post office network could be mutualised, which would mean it would not remain in Government hands, but I would have thought that that was something the hon. Gentleman welcomed.
With regard to the motion, I understand that with Back-Bench business we often have good debates on various issues and that votes are not common. I agree with much of the motion, but hope to be able to reassure the House on a couple of points. In relation to the claim that
“the impending privatisation of Royal Mail will place a question mark over its willingness to maintain what may be loss-making services”
and the reference to providing
“more concrete, long-term protections for postal services in rural areas”,
I hope to reassure the House that the Government have long-term, concrete protections in place for postal services, and indeed that the Royal Mail will have to continue to provide the universal service. Many Members have raised that as a concern.
In setting out the background to how we got where we are today, it is important to remember that the Government are implementing a package of key reforms recommended in Richard Hooper’s independent review, which was first commissioned in 2008 by the previous Government. He set out three clear recommendations that needed to be implemented as a package if the Government wanted to secure the future of the universal postal service: that they should tackle Royal Mail’s historic pension deficit; that responsibility for postal regulation should transfer from Postcomm to Ofcom; and that Royal Mail should have access to private capital to support its ongoing modernisation. The previous Government accepted those recommendations in full, but their Bill was subsequently dropped owing to market conditions.
The Postal Services Act 2011, which was passed a little over two years ago, enables the Government to implement the full package of recommendations. As the House will be aware, we have now relieved Royal Mail of its historic pension deficit—I am glad that the hon. Member for North Ayrshire and Arran was able to welcome that move—and established a new regulatory regime under Ofcom, with stronger powers to protect the universal service. The third and final recommendation, to give Royal Mail future access to private capital, is now being progressed through the planned sale of shares in the company. That is a crucial element of the Hooper package. It will be positive for Royal Mail as a business, enabling it to respond to the changing needs and demands of postal users now and in the future. Most important, it will help secure a sustainable universal postal service in the UK.
Many Members have rightly mentioned that the universal postal service is crucial to the UK’s economy and social fabric, particularly in rural communities, and the coalition Government recognise that. That is why the overarching objective of our postal market reforms is to secure the future provision of the universal postal service, the six-days-a-week service at uniform, affordable prices for everyone in the United Kingdom, regardless of whether they live in urban, suburban or rural communities.
Various references have been made to whether that is a sufficient service or a minimum one, so I thought that it would be helpful to state what it actually means and what is set down in the legislation, which will continue to apply in the event of Royal Mail being sold: six-days-a-week delivery to the home or premises of every individual in the UK; six-days-a-week collection from every access point—post boxes and post offices—in the UK; a uniform, affordable tariff across the UK; the provision of a registered items service at uniform tariff; the provision of an insured items service at uniform tariff; free postage for the blind and partially sighted; and a free service of conveying qualifying legislative petitions. That is all set out in legislation, so regardless of ownership Royal Mail will continue to provide that universal service. The ownership change does not change that; only Parliament can change those requirements.