Nigel Evans
Main Page: Nigel Evans (Conservative - Ribble Valley)Postal Services Bill
Nigel Evans Excerpts
Several hon. Members
Mr Deputy Speaker (Mr Nigel Evans)
Order. There is half an hour left and eight Members are trying to catch my eye. If everybody shows restraint, we might just get everybody in.
Jesse Norman (Hereford and South Herefordshire) (Con)
I have two great interests in the Bill. I speak as chair of the all-party group on employee ownership, which plans to examine the Bill in more detail, and also as head of the Herefordshire save our post offices campaign, which fought hard for several years to prevent local post office closures.
I was surprised by the partisan nature of some Opposition speeches, because there are many aspects of the Bill that Opposition Members should embrace and support. The Government deserve enormous credit for the speed and energy with which they have addressed a thorny and difficult issue. There is a marked contrast between that and the record of delay and compromise under the last Administration, during a period when the financial position of Royal Mail only became worse.
I welcome many aspects of the Bill, including the granting of access to new capital for efficiency and modernisation, the excellent arrangements for employee ownership, and the Government’s tough and difficult decision to take on the pension deficit—a nettle that the last Government signally failed to grasp. They preferred to keep it off the balance sheet, like the £230 billion of private finance initiative debt with which we have had to deal. There is a real possibility that, once those changes have been implemented, Royal Mail and the Post Office will be able to turn the corner. The idea of a new mutual structure for the Post Office is particularly innovative and important. This is a human capital business, which requires the human touch and the service that a mutual can bring to it.
However, serious concerns remain. The universal service obligation, which many Members have mentioned, must be preserved. I remind the House of what happened in the telecoms industry, whose privatisation was in many ways highly effective. The universal service obligation in telecoms does not cover either broadband or mobile telephony, but those are exactly the areas in which rural places such as Herefordshire have had a poor deal over the past decade.
I want to draw particular attention to the issue of back-door closures of post offices. We have a vivid case study of that in my constituency. The village of Pontrilas has an excellent post office and shop, with a sorting office, plenty of parking and disabled access. It is a vital community resource in a very rural area. Recently, the sub-postmaster was sacked by the Post Office for a very small mistake in procedure, from which he derived no personal benefit at all. In any other organisation, that would mean a slapped wrist. His case has gone to appeal but it appears that appeal in the Post Office means one person sitting in judgment on hundreds of cases across the UK. If he loses his job, the effects will be disastrous not merely on him—a man who has had no income for the past six weeks, nor is any to come from the Post Office—but on the shop, which would close. The sorting office would go, too, as most probably would the Longtown post office and its sorting centre up the road in one of the most rural areas of this country.
Therefore, I ask the Minister to take an interest in the situation and to look at the position at the Pontrilas post office. I ask whether he agrees with my view that such back-door closures should be prevented and should be included within the remit of preserving the post office network. I also ask whether he shares my view that we need to grow our post offices, push more business through them and use them to support our towns and villages.
Chris Evans (Islwyn) (Lab/Co-op)
I know that time is short, so I will be as quick as I can. I apologise to any Member if they cannot understand my accent.
This Bill is one of the great “might have beens.” It might have set out a positive policy on employee share ownership. Instead it does not tell us how the shares will be distributed and what employees can do with them. It might have strengthened the link between Royal Mail and Post Office Ltd. Instead it raises new concerns about the viability of many post offices.
The Government's plan for the wholesale privatisation of Royal Mail threatens to turn a public service into a private monopoly. The Government have come up with myriad reasons why Royal Mail should be privatised. First, we were told that privatisation was necessary because Royal Mail could not compete. Royal Mail delivers 99% of the mail to 28 million houses, six days a week. Which competitor in their right mind would want to take that on? The idea that Royal Mail is unable to compete with the private sector is complete and utter nonsense.
We were also told that the privatisation is the only way that Royal Mail can access capital, yet the entire modernisation programme of Royal Mail for the next three years is fully funded. Royal Mail is a profitable business and those profits could and should be retained for future investment.
The proposal to separate Royal Mail from Post Office Ltd, the postal service’s counter network, is of huge concern to many sub-postmasters throughout my constituency. Any retail network losing its main customer base would struggle to remain viable. The Post Office relies on Royal Mail for a third of its income and the fact is that a privatised Royal Mail will be free to use other outlets for its counter services. Should that be followed through, there will be mass closures among local post office branches, and I hope that the Government Members who said that they would campaign to save post offices are getting ready to campaign once the Bill goes through.
I welcome the proposal for mutualisation of Post Office Ltd, but that does not mean that I do not have reservations. Currently sub-postmasters have £2 billion of their own money invested in the post office network and it is vital that they be granted a far greater say in how Post Office Ltd is run. The success of the Co-operative Group provides an excellent model for Post Office mutualisation. However, any attempt at mutualisation would inevitably fail unless backed by solid actions to get the post office network on its feet, with a viable business model. There will be no mutual option for Post Office Ltd if there is no credible business plan. A 10-year inter-business agreement is an absolute must to ensure Post Office Ltd’s viability as both a business and a universal service provider, but the Government have so far refused to look at that. I hope that the Minister does that tonight.
The most important argument against the proposed sell-off is that the public do not want it. The polling is clear on that. They do not want it in Islwyn and they do not want it in the rest of the country. They understand that prices will go up and that the quality of postal services will go down if Royal Mail is sold, and they are right to take that view. The privatisation of Royal Mail makes no political or economic sense and the Bill is nothing but a wasted opportunity.
Mr Deputy Speaker (Mr Nigel Evans)
Order. A couple of Members have sat here throughout the debate but, unfortunately, were not called. I know they will be disappointed, but I will make sure that this counts in their favour when they next put in to speak. I call Nia Griffith.
Nia Griffith
Thank you.
Today we have been debating a Bill that will lead to the sale of Royal Mail. Many Members have mentioned the fact that the Royal Mail letter service has faced increasing competition from e-mail and text in recent years, and the decline in letter volumes has continued even between the publication of Lord Hooper’s original report in 2008 and the update published last month. Many Members have spoken today, and I hope I will be forgiven if I do not mention every one of them by name, but I do want to pick up a few of the points that have been made.
The hon. Member for Northampton South (Mr Binley) serves on the Business, Innovation and Skills Committee and he obviously recognises the need for change. He also made the point that good management is vital, and asked the Minister to make clear how he proposes to secure the quality management that is needed. We all want to hear the answer to that question.
My right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) wanted to find ways of taking modernisation forward. He pinpointed what we all need to know: how to provide more business for the post office network. The Bill does not provide an answer to that.
The hon. Member for Solihull (Lorely Burt) wanted more information about mutualisation, and I recognise that she and her party have long supported mutualisation. Like many of us, she cannot see exactly how these proposals will work for the post office network.
My hon. Friend the Member for Vauxhall (Kate Hoey) highlighted a problem to do with sorting offices, as did other Members with sorting offices in their constituencies. They are concerned about the consequences of the Bill for sorting offices. We also had a brief interlude from the hon. Member for Woking (Jonathan Lord), who made an enlightening and enjoyable maiden speech. [Hon. Members: “Hear, hear.”]
The hon. Member for Angus (Mr Weir), speaking for the Scottish nationalists, stressed concerns about the pressures on a privatised service to reduce the extent of the universal service, and highlighted the particular needs of rural areas, as did many of my hon. Friends. The hon. Member for Southport (Dr Pugh) raised concerns about the future viability of the post office network and stressed the idea that local government and communities need to decide exactly what they want a post office network to do.
My hon. Friend the Member for West Bromwich West (Mr Bailey) has a long tradition of work with the co-operative movement, and he expressed a fundamental philosophical objection to privatisation: the problem of how to square the inevitable drive to make profits and satisfy shareholders with the provision of a service for the public.
The hon. Member for Pendle (Andrew Stephenson) emphasised the problems of the current regulatory regime, and my hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) emphasised the importance of the post office network for pensioners and the local economy.
The hon. Member for Warwick and Leamington (Chris White) spoke in support of the proposed employee share scheme, although he was disappointed that only 10% of the stake will be going to such a scheme. My right hon. Friend the Member for Wolverhampton South East (Mr McFadden) explained that if the taxpayer has taken on the burden of the pension deficit, the taxpayer should share in the upside of the transformation of the Royal Mail. He made a compelling case for keeping the majority stake in Royal Mail in public ownership.
My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) wondered what would happen if a privatised Royal Mail got into financial difficulty, and my hon. Friends the Members for Blaydon (Mr Anderson) and for Middlesbrough South and East Cleveland (Tom Blenkinsop) expressed concerns about job losses, and workers’ pay and conditions in the private sector.
We heard speeches in favour of the Bill from the hon. Member for Gloucester (Richard Graham)—who did, however, request a specific list of several actions to be taken—and the hon. Members for Castle Point (Rebecca Harris), for Folkestone and Hythe (Damian Collins) and for Rossendale and Darwen (Jake Berry).
My hon. Friend the Member for Walthamstow (Stella Creasy) was very concerned about how post offices can be made viable with the loss of Royal Mail business, and I now wish to discuss that particular problem. The Bill, as it stands, provides no guarantee of a continuation of a daily delivery of letters six days a week to every home in the United Kingdom. The Bill, which puts Royal Mail entirely into private hands, provides no guarantee that a wholly privatised Royal Mail would continue to use the post office network to provide its counter services. The Bill breaks the historic link between Royal Mail and the post office. In fact, Royal Mail could use a high street chain whose branches are largely confined to town centres. The Bill even proposes the surreal spectre of a post office network without any Post Office services. With the loss of the one third of its income that comes from Royal Mail business, the post office network could see a closure programme on an unprecedented scale.
Perhaps we were supposed to be taken in by this and lured into some false sense of security, but today the Secretary of State announced new investment.
Mr Davey
Unlike the hon. Gentleman’s Government, we do not wish up new pots of money left, right and centre. Of course it is in the BIS settlement.
The Opposition made much of one point tonight. Apart from their ideological contortions over ownership, they have tried to suggest that separating Royal Mail from the Post Office will somehow be the catalyst for post office closures. Let me explain why they are wrong.
First, a privately owned Royal Mail will not act against its own commercial interests. It will not give up valued retail space in the heart of communities the length and breadth of Britain, creating a vacuum that its competitors would gratefully fill. To think otherwise one would have to be living on Planet Consignia. Have Members heard of Planet Consignia? It is where the previous Government once tried to place Royal Mail. This Government, along with most people in Britain, understand the value and tradition of royalty, and will not make such daft mistakes.
Secondly, Royal Mail has made it clear that the current long-term commercial contract between Royal Mail and post offices will continue. Only this week, the chief executive of Royal Mail, Moya Greene, told me that
“the support that the Government is giving to Post Offices Ltd should mean that the Post Office should become an even stronger retail channel for Royal Mail.”
She went on to say that it was “unthinkable” that there would not be a strong relationship between the Post Office and Royal Mail in the future.
Thirdly, if the Opposition are seriously saying the Government should write into the Bill that there should be a statutory permanent contractual relationship between Royal Mail and the Post Office, they would be risking not only a legal challenge from competitors, but setting the Post Office in aspic. Do they not realise that as Royal Mail’s letter volumes decline, so too will the mail business for the Post Office, so it needs to be given the opportunity to build new revenues? Do they not realise that new sources of revenue will be critical if we are to achieve a financially viable post office network?
I have a confession. I am a postal anorak. Before having the honour of being elected to the House in 1997, I was a management consultant and I specialised in postal companies. I worked on projects for Royal Mail’s equivalents in Taiwan, South Africa, Belgium and Sweden. Although I co-authored a report for the US Postal Service to put to Congress on the commercialisation and liberalisation of postal companies and markets around the world, I have to disappoint the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont); I never worked on a privatisation programme—[Interruption.] Regrettably. Back then, in 1997—[Interruption.]
Mr Deputy Speaker (Mr Nigel Evans)
Order. I cannot hear the Minister, which means that the House cannot hear him either. The Minister must be heard.
Mr Davey
In 1997, Royal Mail was a company that could hold its own with most postal administrations around the world. It needed reform and it needed investment, but it was not balance sheet insolvent or loss-making and it was not as fragile as it is today.
Mr Deputy Speaker, what happened between 1997 and 2010? I will tell you. There was dereliction of duty by the Labour Government, on a massive scale. There were post office closures, lack of investment in Royal Mail and the pension deficit ballooned.
This Government will not shirk our responsibilities. We will take the tough decisions. We will invest in the Post Office. We will free Royal Mail for the investment it needs. I commend the Bill to the House.
Question put, That the Bill be now read a Second time.