Postal Services Bill

Roger Gale Excerpts

Wednesday 27th October 2010 Commons Chamber

[Vince Cable]

That has been happening for 13 years and it has not solved the problem. The problem is deteriorating and the Government cannot provide the investment capital. The right hon. Gentleman is right about public opinion. The public are concerned about the universal service obligation. That is the essence of public service, and it will be protected. The protections will be strengthened under the Bill in a way that I will explain in a moment. When the public understand that it is the universal service obligation, rather than public ownership itself, that is being maintained, they will have considerable reassurance.

[Mr Roger Gale (North Thanet) (Con)]

I shall support Second Reading because Royal Mail is broke. It has to be fixed, which will take a considerable amount of money, and the Bill is the only way forward. The Secretary of State may consider this a peripheral issue but, since Queen Victoria, Royal Mail has borne the royal imprimatur. My understanding is that under European regulations, it is not possible to restrict ownership of Royal Mail once it goes on to the open market, so it could well be sold to the Dutch or the Germans. Notwithstanding the provisions of clause 60, how will the royal charter be maintained?

[Vince Cable]

We certainly do not have any doctrinal or other objections to foreign ownership. I spend a lot of my time trying to attract foreign investors to the country, but, as far as the royal charter is concerned, it is clear that the association with the monarchy is probably the most powerful brand that the company can possibly have, and there will be every interest in the new owners continuing to maintain it.

We need to be careful of specific issues. We need to be careful that the new owners do not abuse the royal association, and we are discussing with the palace how we build in those protections. The monarch will continue to have the right, which we are also building in, to ensure that any new stamp, for example, is cleared by the palace. So, the royal interests in the matter are fully protected. We are very sensitive to them and to their importance.

Let me return to the core of the argument, which is the sale of shares in Royal Mail. That is a departure from the previous Government’s Bill, but I should remind the House that the purpose of the Bill before us is not the sale of shares in Royal Mail for its own sake, but rather, as I pointed out to the right hon. Member for Croydon North (Malcolm Wicks) a few moments ago, the protection of the universal postal service and Royal Mail as the only company capable of providing it.

It is therefore right that we allow for the flexibility to seek the investment required to secure the future of Royal Mail and the universal postal service. So, we see no reason at this stage to set an arbitrary target for how much we must sell, by when and by which method. Those are critical decisions that need to be taken with proper advice and in the full knowledge of market conditions, assessing both value for money and the company’s needs.

Of course, Parliament will be kept informed of those decisions, and the Bill requires a report to Parliament once a decision has been taken to begin a sale process. I hope to be in a position to report to Parliament on the sale process in the first half of this Parliament. In the longer term, I do not believe that there is a need for the Government to keep a stake in Royal Mail, but I will ensure that the Government have the flexibility to ensure the right outcome for taxpayers, for Royal Mail and for its employees.

Let me turn to the interests and concerns of the employees. The employees are critical to Royal Mail’s ability to modernise and thrive, and it will come as no surprise to Members when I say that Royal Mail has a history of poor industrial relations. Members may have noticed that Unite announced two days ago that it would ballot Royal Mail managers on industrial action. That recent development aside, I have been heartened by some of the positive steps that have been taken to improve industrial relations—in particular, the agreement with the Communication Workers Union on the modernisation of the business. The agreement accepted that, unfortunately, job losses would be associated with the modernisation. It accepted, too, that there would need to be changes to working practices, and that mail centres would close. The plan has already been agreed with the CWU, and the company is implementing it now.