Postal Services Bill

Richard Fuller Excerpts

Wednesday 12th January 2011 Commons Chamber

[Bob Russell]

I am not sure whether I am grateful for that intervention, but if the hon. Gentleman is saying that the previous Government were impotent, I accept his observation.

[Richard Fuller (Bedford) (Con)]

The hon. Gentleman has been so gracious in giving way that I need to go back about four interventions to what he was saying about what the current Government are doing, rather than going into the history. When he acknowledges that the coalition Government have put substantial amounts of money into defending the post office network, does he accept that there really is a commitment behind the Bill to maintain the viability of the post office network, and there must be good reasons why his proposal is not permissible? Would he care to comment on the implications at European Union level?

[Bob Russell]

I suggest that the hon. Gentleman discuss that last point with the hon. Member for Stone (Mr Cash), who can enlighten him far better than I can. I thank him for the intervention, but the short answer is that I do not know what impact my new clause would have on EU legislation. I am sure that if there would be an impact we will hear about it from one of the Front-Bench speakers at some point.

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[Mr Binley]

I am grateful for the interjection. What an awful statement for somebody concerned with a business to make, but then I have never been very keen on the gentleman’s boss: I would not have appointed Lord Mandelson, either.

[Richard Fuller]

To echo the Minister’s comments about the observations on the current management by Members on the Public Bill Committee, I note that there has been a substantial improvement on the legacy management. The current management really shine a torch forward for Royal Mail Group. Does my hon. Friend the Member for Northampton South (Mr Binley) echo my sentiment that, in the sight of ineffective, hostile management over many years, there was an excellent outcome when the Communication Workers Union and other unions put together a modernisation programme and commitment for our postal services, privatised or otherwise, for the long term? That was a substantial triumph by the unions against hostile management.

[Mr Binley]

I accept that interjection and support that point, too, because I was one of those who consistently said that we should be proud of our Royal Mail work force. I am sure that my hon. Friend visits his local sorting offices, as the hon. Member for Linlithgow and East Falkirk and I do. We visit our sorting offices and post offices regularly and we know the quality of people we are dealing with. I would be proud to have them in any organisation with which I was associated, so paying tribute to the work force at this stage has real value. I accept that and thank my hon. Friend for his intervention.

To return to the main thrust of my contribution, I am concerned that, unless we are careful, the separation of Royal Mail and post offices will have a sizeable detrimental effect on the viability of the post office network. The truth is that the network is a diminishing resource even as we speak. My hon. Friend the Member for Colchester (Bob Russell), who moved the new clause, said that some post offices had temporarily closed. Well, if you believe that, you’ll believe anything. In truth, they are closed for business, just as many pubs are, which is another problem in rural areas—but not a part of the Bill.

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[Mr Anderson]

We may compare the IBA to a sticking plaster covering a wound, but if it continues following privatisation, it will provide that little bit of additional protection that would not be there otherwise. Otherwise, post offices will be left wide open to businesses that simply want to make money. Why else would they want to take on post offices? Who wants this not to happen? The people who want it not to happen are those who want to buy postal services, who want to compete, and who want to make more and more money.

If we had been sitting here 25 years ago, we would have been debating the privatisation of the utilities. We would have heard all the arguments that we have heard today about how dynamic privatisation is, and about the efficiencies that it produces. E.ON is raising prices by 9% at a time when people are facing pay freezes. That is the truth about privatisation, and that is what will happen in the case of this privatisation.

[Richard Fuller]

I should like some clarification. We are using the phrase “inter-business agreement”, but the hon. Gentleman seems to be describing it as a 10-year continuing subsidy mechanism. Is he saying that he wants an inter-business agreement to be the transport mechanism for a continuing taxpayer subsidy, regardless of whether Royal Mail is privatised?

[Mr Anderson]

I want the IBA to give sub-postmasters the security that they have asked for. They say that it will give them faith in their ability to continue in their business. After all, it is their money. As I said earlier, they will lose £2 billion if the Bill does not work. They would much rather remain in a system enabling post offices to remain in operation and to receive support from the public purse. If we had adopted that attitude, we would not be having this debate.

[Richard Fuller]

I thank the hon. Gentleman for giving way to me again. There is an issue here that specifically concerns subsidy, and we should call it subsidy rather than an inter-business agreement.

The hon. Gentleman has cited the comments of Royal Mail executives as well as those of members of the National Federation of SubPostmasters. They did not ask for a 10-year IBA. Was that because the changes proposed in the Bill will enable managers to manage the operations of the business? Is not one of the problems that we have experienced in the past the fact that Government have shackled management and prevented it from managing effectively? That is the reason for the programme of closures and the inability to modernise effectively.

[Mr Anderson]

That is true, but the managers have not made the best of the deal that they have been given. They have received plenty of public money, but they have not succeeded. There are a number of reasons for that, but in recent months we have seen a break from it. We have seen new management; we have also seen the trade unions presenting a modernisation plan that can and will work. Those developments are being stopped in their tracks by the attitude of the Government, who want privatisation at all costs.

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[Richard Fuller]

Royal Mail is, first and foremost, a people business. It is a people business, or it is no business at all. We know that not only because of the campaigns that hon. Members from all parts of the House have conducted to save post offices in their constituencies, but because of the hard work undertaken by Royal Mail workers throughout the year, particularly in the run-up to Christmas. We also know it because of the hard and vigilant work that the Communication Workers Union has put in to help us understand the issues involved in the Bill, as I experienced when Paul Moffat, the CWU representative for my region, came to see me. We also know it because of the groundbreaking modernisation agreement that the CWU made with Royal Mail. That is a signal triumph about which Mr Hayes and his colleagues can rightly be proud. It is that people aspect of the Bill on which I shall focus my brief comments.

[Fiona O'Donnell]

Does the hon. Gentleman agree that part of the reason workers go the extra distance is that they are public servants, and that the Bill will destroy that ethos?

[Richard Fuller]

No, I do not agree. I believe that they do so because they have in their hearts a sense of public service, and the Bill offers a much better, more secure way for them to fulfil their sense of public service obligation by securing a stronger foundation for the Royal Mail Group. In addition, it contains groundbreaking provisions that extend the principles of employee participation and employee ownership, which are most welcome.

I know that I disagree with the CWU about Government ownership, and in its most recent note it listed some of the things that could happen under continued Government ownership. It stated that the Post Office could move to be more profitable, raise commercial loans or enable the relaxation of competition. Those things could happen, but they could have happened in the past and did not.

What is the legacy of Government ownership of the institution of the Royal Mail Group? It is a revolving door of, let us face it, not particularly competent management until the recent past; a crippling burden of unfunded pension liabilities; and a delay of more than 18 months in giving management access to capital. Those things have held back the Royal Mail Group, so Government ownership is not the answer. The right hon. Member for Southampton, Itchen (Mr Denham) made the assertion, with which I do not agree, that the case for private ownership has not been made. I would say that the case for ending Government ownership has truly been made.

I believe that the CWU and workers now need to look forward at how we can use the Bill to extend further the principle of employee participation, and how we can continue to make it the groundbreaking legislation that many Members of all parties would like it to become. Let us ensure that employee ownership, which the Minister rightly said can be at a minimum of 10%, can truly be a model for how that principle should continue. The mutualisation of the Post Office should be thought through so that long-term business interests are secured when people put their own capital into a business to fulfil a service obligation to the people of this country.

Most importantly, as the Minister goes through the process of looking for the future owners of the business, with the participation of the CWU and the workers’ representatives, it is crucial that he stresses that the management, with the unions, must secure another groundbreaking modernisation programme. That is an absolute prerequisite if any future owner is to secure a bright future for the Royal Mail Group as it goes forward and meets the challenges of the years ahead.