Royal Mail and the Universal Service Obligation

Sam Tarry Excerpts

Thursday 12th January 2023 Westminster Hall

[Sam Tarry (Ilford South) (Lab)]

It is an honour to speak under your chairship, Ms Ali. I want to start by expressing my solidarity with members of the Communication Workers Union who are taking industrial action for better pay and conditions, and with the Romford amalgamated branch, whose members in the main sorting office are almost a stone’s throw from my office in Ilford. I give a particular shoutout to someone who has been on the picket lines leading the charge: Bill Bishopp, who I like to call the branch secretary. Employees like them are heroes who have worked throughout the pandemic. They have made Royal Mail one of our most beloved national institutions, which, as many Members have said today, our nation—the length and breadth of Britain—relies on. Any future must be one in which its workforce is valued, treated fairly, and paid fairly.

I also pay tribute to my hon. Friend the Member for Jarrow (Kate Osborne), who has many years’ experience working with Royal Mail, for securing this debate.

In the last year, as my hon. Friend the Member for Wansbeck (Ian Lavery) has said, Royal Mail Group announced record-breaking profits of £758 million, £567 million of which was promptly paid out to shareholders. The crazy thing is that just a few weeks later, it announced significant losses, alleging it was losing over £1 million a day. At that point, shortly after, Royal Mail went cap in hand to the Government to plead poverty and ask for permission to reduce its commitments to the universal service obligation from six days to five. That is a wholesale levelling down of Royal Mail, and it has severely jeopardised the viability of the universal service obligation—the cornerstone of an effective and modern postal service.

Royal Mail has consistently failed to hit its quality of service targets in the past five years. As many Members have said, the obligation provides a crucial safety net to everyone in the UK as we all have a fundamental right to request access to a minimum set of communications services at affordable prices. It ensures that no matter where we are, Royal Mail must provide a six-days-a-week, one-price-goes-anywhere postal service. If we lose that universal postal service, countless homes in the UK will lose that safety net and find themselves at the mercy of a broken and imbalanced privatised system, as we have already seen happening over the past decade, that allows providers to cherry-pick the cheap, easy-to-reach customers and ignore those in more remote and less accessible communities.

The Government cannot keep letting Royal Mail off the hook in its consistent failures and must hold it to account. People in this country have to be able to rely on their postal service. As many Members have said today, vital medical letters and urgent bills need to arrive on time. At some point, someone has to say, “Enough is enough.” The company is fundamentally run as a dreadful business, but it need not be run in that way. Surely breaking the USO is in direct conflict with the levelling-up agenda. If the Government claim to champion that in every part of the UK, concerns about Royal Mail demonstrate a levelling down across many parts of our country—perhaps not in my constituency, but, as many Members have said today, in rural constituencies that really rely on the services.

At the same time as Royal Mail sought to tear the USO to shreds, its senior leadership used that mismanagement of funds to justify cutting 10,000 postal jobs and offering a derisory pay rise of only 2%. As we all know, inflation is spiralling up massively on a weekly basis. All the while, Royal Mail leadership retained and recruited agency staff, while engaging in disgraceful fire and rehire tactics to introduce owner drivers, who are on 20% less pay and insecure contracts—effectively turning a national institution into another gig economy employer. It is no wonder that the CWU, which represents 120,000 postal workers, has taken to the picket lines to oppose that disgraceful attack.

Will the Minister condemn those disgraceful employment practices, which almost guarantee a race to the bottom on pay and conditions? If so, what measures will the Government take to ensure that quality, secure jobs in the sector are not replaced by insecure and poorly paid positions? This vital service has been privatised and is run for profit, but I wonder whether the Government might consider something more radical. According to We Own It research, we would save £171 million a year by bringing Royal Mail into public ownership, which is enough to open 342 new Crown post offices, with post banks. Some 68% of the public would love Royal Mail to be brought into public ownership. Doing so would be both popular and practical.

The public have been sending letters by Royal Mail for more than half a millennium. For isolated, vulnerable and elderly people, a friendly face on the doorstep can be a lifeline. One local postie in Ilford, Michelle, told me:

“I’m very proud of the work I do; it’s not just about delivering Mail and parcels. I love keeping an eye out for those who are vulnerable or lonely and having a chat with them to brighten their day. Keeping the spirit of the postman alive for the children as many posties have before me. I’m the eyes and ears for missing pets etc. we are more than just a courier service. We keep the community going…We will not give up on providing the service the public deserves and has known for 500 years.”

If a postie can say that, the Government must consider what on earth is going on, and how we fix it.