Royal Mail and the Universal Service Obligation

Rachel Hopkins Excerpts

Thursday 12th January 2023 Westminster Hall

[Rachel Hopkins (Luton South) (Lab)]

It is a pleasure to serve under your chairship, Ms Ali. I congratulate my hon. Friend the Member for Jarrow (Kate Osborne) on securing this important debate.

Royal Mail is a proud British institution, established by King Henry VIII in 1516. I begin by thanking postal workers in Luton and across the UK for their work all year round. I am pleased to have a delivery office in my constituency of Luton South; I have visited it many times. I have spoken with postal workers and their local and regional Communication Workers Union representatives, and I have seen at first hand their dedication to delivering—literally and metaphorically—for our community.

Postal workers take huge pride in their job, and want to ensure the long-term success of the service. Strike action is never taken lightly. Substantial real-terms pay cuts and attacks on terms and conditions of employment give workers little choice but to stand up for their livelihood. Alongside those legitimate grievances, there is also the threat to the universal service obligation, which is the obligation to adopt a “one price goes anywhere” principle of affordable postal services. Under the minimum service requirements enshrined in the Postal Services Act 2011, Royal Mail must deliver letters to every address in the UK six days a week, at a uniform price, and parcels five days a week.

As we have heard, in May 2022 the Royal Mail Group, which is now International Distributions Services, announced record-breaking profits for 2021 of £758 million and then promptly paid £567 million to its shareholders. Then, just weeks afterwards, Royal Mail announced significant losses, alleging that it was losing over £1 million a day. That led to the concerning approach to the Government to request a reduction of the universal service obligation, from an obligation of letter delivery six days a week to an obligation of only five days a week, between Monday and Friday. It is clear that there are serious questions to be asked about what is going on at Royal Mail. Shareholders are given huge dividends, yet soon afterwards up to 10,000 postal workers’ jobs and the six-day-a-week delivery service are at risk. It just does not stack up.

Now we have the prospect of a takeover of Royal Mail by Vesa Equity, which is also concerning for the future of the universal service obligation. There is a serious risk that Vesa Equity would sell off Royal Mail UK but retain control of General Logistics Systems—the international parcel subsidiary—which continues to be profitable and has previously helped to cross-subsidise the UK business.

Reducing the universal service obligation would be hugely detrimental to the scope and quality of the UK’s universal postal service, which is heavily relied on by businesses and consumers. It would also lead to the loss of thousands of permanent Royal Mail jobs around the country, exacerbating regional inequalities.

Let me reiterate the points that have been made this week. The Government must guarantee that the universal service obligation is secure for the future and will continue to be provided by Royal Mail, because people value their local postal workers. Just look at the covid-19 pandemic, when postal workers put their lives on the line to deliver letters and parcels, as well as providing vital contact for vulnerable residents, many of whom were isolated, elderly or lived on their own. We must focus on the value of our postal service—particularly its relationships and its reach across the UK—and not just on the cost of individual transactions.

This key community contribution must be protected, and I agree with my hon. Friend the Member for Jarrow that Royal Mail must not adopt the gig economy employment model of low wages and insecure contracts. I therefore ask the Minister whether there needs to be an inquiry into whether the mismanagement of Royal Mail will undermine the postal universal service obligation, and I look forward to his response to the debate.

Britain’s Industrial Future

Rachel Hopkins Excerpts

Tuesday 15th November 2022 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

This Conservative Government are incapable of fixing the structural problems at the heart of our economy. Just look at the past 12 years, when we had six different growth plans. In the past six years, we have had five Prime Ministers and, just this year, we have had four Chancellors. Where is the stability? Where is the consistent plan? Instead, there is a track record of wasted opportunities and mistakes. There has been chaos under the Conservatives, who crashed the economy.

Our growth rate since 2010 has been only 1.4%—lower than the OECD average and behind the USA, Canada and Germany. The country faces the lowest growth in the OECD over the next two years, behind countries including Italy and Greece. The Tories have dismantled our economy by entrenching low growth, low productivity and declining living standards. Working people are expected to pay the price of Tory failure.

For too long, industrial policy in the UK has been plagued by short-termism and its vulnerability to political changes. The British public need a fresh start and part of that is reaching a collaborative settlement with the European Union. Many of us voted to leave the European Union to see a strong, democratic sovereign state working in the interests of the British public: a state that works with business to grow the economy, create good jobs and deliver public infrastructure and projects. Essential to that is an ambitious, Government-driven industrial strategy. We need to rebuild British industry and deliver growth that makes all parts of our country better off.

A recent Rebuild Britain article stated that our country needs

“greater self-reliance with jobs, skills, industries and technologies rooted in local areas serving the needs of localities and the wider nation”,

as my hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) outlined so well.

A modern industrial strategy requires building a partnership between the public and private sectors to meet the immense challenges we face. Let us take the automotive industry, which employs 780,000 people in our country and accounts for 10% of total UK exports. Car and van manufacturing can be found in every region of the UK, from the north-east to the east of England, and particularly in my constituency of Luton South, which is incredibly proud of its historical ties to the industry through the local Vauxhall plant.

Despite the Minister’s rhetoric, with the fast approaching 2030 deadline prohibiting the sale of new petrol and diesel cars, unless Britain secures domestic gigafactories for manufacturing batteries, manufacturers will move elsewhere to build their future electric models. Building gigafactories would contribute to meeting net zero, distributing growth across the country and helping to expand automotive exports. It is a win-win-win. However, I heard little about gigafactories from the Minister. Government inaction already means that the UK is far behind other European countries.

The UK has one gigafactory in operation, whereas Germany has five and a further four in construction, not to mention France and Italy, which are set to have twice as many battery manufacturing jobs as us by 2030. Manufacturers such as Vauxhall in Luton need certainty. They need a Government prepared to shape a competitive environment. A consistent policy framework, which businesses can trust, will encourage increased investment over the long term.

As part of our green prosperity plan’s national wealth fund, a Labour Government would part-finance the creation of three new, additional gigafactories by 2025, and we have a target of eight by 2030. Our plan delivers the certainty needed for automotive manufacturers to upscale their operations, in the knowledge that the Government have made a long-term commitment to the industry.

For the automotive sector and many others, we must safeguard the UK’s domestic steel production. While Governments around the world are committing to their domestic industries with long-term strategic investment in green steel production, the Conservatives have failed to invest in the transition, instead attempting to weaken safeguards that protected our steelmakers from being undercut by cheap steel imports and splashing tens of millions on imported steel to build British schools and hospitals.

[Holly Mumby-Croft]

Will the hon. Lady give way?

[Rachel Hopkins]

No; I am sorry.

Leaving the European Union enables us to increase strategic investment in our key domestic industries; it should not mean stripping back regulations and leaving them exposed to the global market. Labour understands that, and in government we will invest up to £3 billion over the coming decade to green the steel industry. Labour will end the short-termism through our green prosperity plan and by introducing the industrial strategy council, placed on a statutory footing. Labour will work in partnership with business to tackle some of society’s biggest challenges. We are ready to rebuild the country fit for a fairer, greener future. It is time for a fresh start.

Retained EU Law (Revocation and Reform) Bill

Rachel Hopkins Excerpts

2nd reading
Tuesday 25th October 2022 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

I rise to speak in support of the Opposition’s reasoned amendment. Many of us voted to leave the European Union to see a strong, democratic, sovereign state working, facilitating UK business growth and decent jobs, and ensuring the delivery of public infrastructure and services in the interests of its citizens. Contrary to the assertions made by Conservative Members, I, too, believe that the UK can thrive outside the EU. I support the supremacy of our Parliament, as many hon. Members have put forward already, but this rushed, dog-ate-my-homework legislation presents a future of more chaos and uncertainty under this Conservative Government.

As we all know, at the end of the transition period, the European Union (Withdrawal) Act 2018 incorporated most EU law on to the UK statute book as “retained EU law”, so there is a need to resolve its future status and relevance in terms of how applicable it is and whether and where it should be placed in a hierarchy relative to UK primary legislation. Indeed, setting out a future sovereign state after Brexit requires a legislative process to establish the future status of laws—I believe that people expect that.

The Government’s Bill, however, gives enormous powers to the Executive to repeal and amend—but not improve—vast swathes of rights and regulations. In doing so, the Government are flying blind, as they have not bothered to publish an exhaustive list of the retained EU law that is in scope. That is as disrespectful to all citizens and businesses, whatever view they took of our membership of the EU, as it is to the House, which in effect, is not being informed about how many pieces of legislation are affected.

While the retained EU law dashboard is helpful, it is not an comprehensive list, as we heard earlier. The Commons Library has said that the Bill will apply to at least 2,400 pieces of legislation, so will the Minister commit to publishing in the Library, as a matter of urgency, a comprehensive list of the legislation that would be in scope of clause 1? This is an important point of principle; democratic parliamentary scrutiny must not be ridden over roughshod by the Government.

Further to not being certain about the full details of the EU retained law that is in scope, it is absolutely chaotic to then pursue a sunset clause that simply removes it all from the statute book by 2023. That just smacks of a Government shying away from scrutiny and lacking any sense of accountability, in a chaotic pursuit of a free-market race to the bottom of workers’ rights and environmental protections.

The Conservatives have shown that they cannot be trusted on the economy, and while they are hellbent on causing more chaos and uncertainty for the British people, Labour will act in the national interest and make Brexit work. We just need a general election to offer the certainty and leadership that our economy needs.

Energy Prices: Support for Business

Rachel Hopkins Excerpts

Thursday 22nd September 2022 Commons Chamber

[Mr Rees-Mogg]

This is of fundamental concern to His Majesty’s Government.

[Rachel Hopkins (Luton South) (Lab)]

I want to try again on local authorities, because I am not sure the Secretary of State understands that the review is simply too late. Too many councils already face budget holes—Luton Council faces a budget hole of £10 million this year—because of increasing energy costs, inflationary pressures and increasing demands. Has he had any conversations with the Secretary of State for Levelling Up, Housing and Communities about the budget planning process? Local authorities are required to produce medium-term budgets before April next year.

[Mr Rees-Mogg]

The degree of certainty that is being offered is greater than in a normal year. We are saying that what will happen will be announced after the three-month review has taken place, in plenty of time for 1 April. Normally, local authorities are dependent on the vicissitudes of the market.

Oral Answers to Questions

Rachel Hopkins Excerpts

Tuesday 12th July 2022 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

6. What assessment he has made of the impact of the rise in energy prices on (a) households and (b) businesses.

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

The Government recognise the impact that increasing energy prices are having on households, which is why we are providing £37 billion in support for consumers this year alone. The Government are in regular contact with business groups and suppliers to explore ways to protect businesses.

[Rachel Hopkins]

Citizens Advice Luton has seen a 119% increase in local people saying they cannot afford their energy bills after April’s price increase, even after cutting back on other essential spending. I heard the Secretary of State say that the issue is talked about constantly in Cabinet, but does the Minister recognise that the energy price cap increase later this year will push even more families into poverty and hardship?

[Greg Hands]

I completely agree with the hon. Lady in her analysis of the underlying issue: the big rise in global energy prices over the past 12 months. That is exactly why we are taking the action we are taking: £37 billion-worth of support for consumers and bill payers over the course of this year. That is a massive amount of Government support going into ensuring that people get the support they need to be able to pay those bills in the coming months.

Employment and Trade Union Rights (Dismissal and Re-engagement) Bill

Rachel Hopkins Excerpts

Friday 22nd October 2021 Commons Chamber

[Sarah Owen]

Absolutely. We hear terms such as “levelling up”, but what we need is action, for exactly those people—those who are suffering from the horrific levels of child poverty and the insecurity of work. That is having a physical, mental and economic impact on constituents across the country. We need to see some action, and today would be a good time to start.

People in Luton North need jobs to be protected and created, and they need that now. We have been hit harder than most places, with our airport and proud manufacturing industry bearing the brunt of the pandemic. But these bad employers hurt the good ones, and therefore they hurt our economy and our constituents.

We had a statement earlier today—one that apparently could not wait—about improving the health of our nation. What better way could there be to improve our country’s health than giving people peace of mind, money in their pockets and security in their jobs?

[Rachel Hopkins (Luton South) (Lab)]

My hon. Friend is making an excellent speech. On improving health, does she agree that having employment rights from day one would go a long way to improving workers’ rights?

[Sarah Owen]

I absolutely agree with my fellow Luton MP. We are talking about how we cannot go back to where we were, and about building back better. I think all of us represent constituents whose priorities are different from their priorities before the pandemic. What we hold dear and take for granted has changed. Workers’ rights must be at the heart of that, and providing security in the workplace—providing a secure job, a secure home and a future that we can all look forward to—is key to that. That is why I ask the Government and their Members to put their votes where their mouths are and vote to end the practice of fire and rehire.

Oral Answers to Questions

Rachel Hopkins Excerpts

Tuesday 6th July 2021 Commons Chamber

[Paul Scully]

Employment law is clear that an individual’s employment rights are determined by their employment status, which in turn is determined by the detail of their working arrangement. Government actively encourage businesses to ensure that they are adhering to their legal obligations and that individuals are treated fairly and in accordance with the law.

[Rachel Hopkins (Luton South) (Lab)]

What steps he is taking to support high street businesses.

[Sam Tarry (Ilford South) (Lab)]

What steps he is taking to support high street businesses.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Our comprehensive economic response to business is worth more than £352 billion, including grants, the furlough scheme, tax deferrals, and business rates relief. We have extended the protection of commercial tenants from eviction and debt enforcement due to non-payment of rent until 25 March 2022.

[Rachel Hopkins]

Businesses in Luton South, whether they are in the town centre, Bury Park or High Town, have told me that additional support is required to safeguard their future and local jobs. Small businesses need Government to bring forward a plan to support them as we recover, particularly those that have had to take out loans to pay their rent. Does the Minister recognise that a proper debt restructuring plan will be vital in alleviating the burden of debt and in helping small businesses get back on their feet?

[Paul Scully]

It is important, yes, that first we reopen. I am glad that the Prime Minister is making encouraging signs regarding 19 July, so that small businesses in particular can welcome back customers and start to recover; that helps get into the recovery. We will continue to flex and extend our support for those businesses. Much of that support extends to September and beyond.

GKN Automotive Plant: Birmingham

Rachel Hopkins Excerpts

Wednesday 28th April 2021 Westminster Hall

[Rachel Hopkins (Luton South) (Lab) [V]]

It is a pleasure to serve under your chairship, Dame Angela. I congratulate my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) on securing this extremely important debate. I am a Unite trade union member, and all of us in the Labour and trade union movement fully understand, particularly on International Workers’ Memorial Day, that an injury to one is an injury to all. That is why I am speaking in this debate as the Member of Parliament for Luton South, a constituency in my home town of Luton that has a long history of car and van manufacturing at the Vauxhall plant, which provides skilled jobs. I know how important those jobs are to our local economy and our communities’ livelihoods, so I send my solidarity to the workers at GKN in Erdington, whose jobs are at risk.

Manufacturing matters, and GKN is a vital strategic supplier to our automotive sector. It has the capacity to transition to new products for electric vehicles, as we have heard. That green capacity will be essential in the future for plants such as Vauxhall in Luton South. Since acquiring GKN, Melrose has sought to offshore manufacturing and transfer—

[Dame Angela Eagle (in the Chair)]

Order. Rachel, could you hold your microphone a bit closer? That is much easier for us to hear. When it is dangling, you are going very quiet. If you hold it closer to your mouth, that would be fantastic, because we will hear you much better.

[Rachel Hopkins]

I am very sorry, Dame Angela. Apologies for that.

Since acquiring GKN, Melrose has sought to offshore manufacturing and transfer successfully won contracts for UK work away from Birmingham. We know that it wants to offshore production to Poland and France to maximise profit, showing a total disregard for its loyal workers and the surrounding community. As my hon. Friend the Member for Birmingham, Erdington said, the GKN plant is based in an area where unemployment stands at 12.5%, which is significantly higher than the national average. The loss of 519 skilled jobs at the plant in the middle of a pandemic would devastate the community.

The closure of GKN would also have a hugely damaging impact on our domestic automotive supply chain. As we have seen with other forms of manufacturing during the pandemic, it is important to have a robust domestic supply chain. That is increasingly essential for the automotive sector, due to the new rules of origin requirements with regard to tariffs.

It is economically illiterate of the Government to allow the closure of GKN in Birmingham and the offshoring of production. The loss of GKN—a critically important tier 1 supply chain manufacturer—will have a knock-on impact across our automotive sector. What I and others here find astounding is Melrose’s lack of discussion with the workers’ trade union, Unite. Unite’s two-stage plan for the GKN plant, formed through work with shop stewards and independent experts, outlines how productivity can be improved with additional savings, followed by a plan to produce eDrive components for electric vehicles. Estimates suggest that would save more than Melrose’s proposal to close the plant in Erdington, as independent experts believe Melrose has underestimated the cost of relocation.

We need companies such as GKN with eDrive technology based in the UK to help facilitate the sector’s green transition. Demand is increasing for electric vehicle components, with global electric and plug-in hybrid cells expected to rise to 40 million vehicles annually by 2025. Expansion of the eDrive could secure the site’s long-term future and play a pivotal role in the UK industry’s critical manufacturing capability. The eDrive equates to 15% of electric vehicles, comparable to next generation batteries. By 2030, that is expected to increase and make a significant contribution for exporters to meet new rule-of-origin thresholds. The room for GKN’s expansion is there, ready and waiting, and may not only save jobs, but could create them in the long run.

If Melrose intends to push on with this decision, it poses a critical temperature test of the Government’s industrial strategy, because what is levelling up if it is not protecting, promoting and creating skilled, well-paid jobs that are rooted in communities across the UK? If the Government allow GKN Birmingham to close, it will undermine and further expose the UK automotive industry’s supply chain to risk.

The Government must intervene and work with all parties to prevent the closure of GKN in Birmingham, and preventing the closure must be part of a wide interventionist green strategy to transition the automotive sector, ahead of the 2030 ban on new petrol and diesel vehicles. We need an electric vehicle revolution that backs manufacturers and creates new jobs. The Government must lead this step change by creating new gigafactories, protecting and enhancing the domestic supply chain and making electric vehicle ownership affordable. The UK has the skills and capacity to be a global leader in the electric vehicle market, but the Government must create the foundations for the sector to flourish.

UK Steel Production: Greensill Capital

Rachel Hopkins Excerpts

Thursday 25th March 2021 Commons Chamber

[Kwasi Kwarteng]

I am delighted to see my hon. Friend taking part in these critically important proceedings. I know how hard he has worked not only to win his seat and be an excellent, first-rate Member of Parliament, but also in his passion for green energy, renewable technologies and hydrogen; in fact, I am surprised that he did not mention hydrogen in his question. I am delighted to work with him to ensure that we have a future for the steel industry here in the UK.

[Rachel Hopkins (Luton South) (Lab) [V]]

Tackling emissions from steel is critical to the fight against climate change, and I have heard the Minister refer to green steel. The clean steel fund was announced in 2019, but steelmakers will not be allocated any funding from the £250 million scheme until 2023. Why will Ministers not bring forward this funding to boost the industry and its green future?

[Kwasi Kwarteng]

As the hon. Lady knows, we are always looking at ways in which we can promote green steel and industrial decarbonisation. I have alluded many times to the fact that we published the strategy last week, and the steel fund is clearly part of that strategy.

Vauxhall at Ellesmere Port and Battery Manufacturing Strategy

Rachel Hopkins Excerpts

Monday 1st March 2021 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend is absolutely right. The midlands, the Black Country and his constituency are a key part of this story. I have mentioned the 10-point plan many times. It was launched only in November—four months ago—and it has really set the path and set the direction in this area. He is absolutely right: we are 100% committed to success, and I hope that he and his constituents will benefit greatly—I am sure they will—from the transition to a greener and cleaner economy.

[Rachel Hopkins (Luton South) (Lab) [V]]

Vauxhall has made cars and vans in my constituency since 1903. The plant’s loyal and efficient workforce and the Unite union reps have worked flexibly with the company over many years to maintain production at that site, including of the successful Vivaro electric van.

The continued and future success of electric vehicle manufacture, including good skilled jobs for my constituents, is reliant not only on battery production and gigafactories but on investment in rapid charging infrastructure, so will the Secretary of State confirm the Government’s commitment to securing investment in this much-needed green infrastructure?