Thomas Docherty
Main Page: Thomas Docherty (Labour - Dunfermline and West Fife)
Lorely Burt
This final string of amendments is another testimony to how the Government have listened to colleagues on both sides of the House. I greatly welcome a number of the amendments, particularly those that make the duties of Ofcom stronger than under Postcomm. I want to ask the Minister about amendment 19, which specifies that the Secretary of State can override the regulator on access points. We need to be wary about setting up an independent body but saying, “Never mind, the Secretary of State can override it”. We want to be sure that that could be done only to the benefit of the consumer. Bringing politics into the matter concerns me a little, so will my hon. Friend confirm that he cannot envisage any circumstances in which the Secretary of State could intervene, perhaps to specify that we do not need as many access points as now?
I particularly welcome amendment 17. Royal Mail has found it difficult to make a profit given the constraints under which it has had to work. The previous situation was impossible, so I am delighted with the amendment. We had to address the appalling decline in profitability, which was due to the ceiling imposed by the previous Government, who were unwise in their overzealous interpretation of the European legislation. If we can do it now, why could we not have created a more competitive environment for Royal Mail in the past? No one can make a profit with one hand tied behind their back. I particularly welcome Lords amendment 22, which guarantees that Royal Mail will remain a USP for 10 years, thereby removing any lurking uncertainty, which is particularly helpful.
Finally, Lords amendments 20, 15 and 25 require pre-notification to Ofcom of the planned commencement or expansion of a letters business on a specified scale. That will allow Ofcom to evaluate the potential impact beforehand, not after the stable door is opened and the horse has bolted. I wonder whether the Minister could say a little more about the circumstances in which he would envisage the provisions applying. Opposition Members have rightly raised the spectre of lots of other organisations wanting to come in and expand their letter delivery services, so how will the provisions work to ensure that Royal Mail’s commercial interests remain viable?
Thomas Docherty (Dunfermline and West Fife) (Lab)
I would like to press the Minister on Lords amendments 16 to 19, to clause 28. He has rightly spoken of the need for Royal Mail to continue to modernise, and I hope to give a simple example of why this is so important.
The House will recall the severe snow that affected large parts of Scotland last winter, including West Fife in my constituency. Fife was particularly badly hit because of the incompetence of Fife council, which failed to clear the roads and keep traffic moving. That had a huge knock-on effect for Royal Mail. If residents are stuck in villages or large parts of Dunfermline and cannot get out, it would quite obviously be unreasonable to expect Royal Mail to be able to deliver a regular service, because for genuine health and safety reasons it is vital that posties are not exposed to unnecessary risk. However, Royal Mail failed to provide a robust contingency programme to deal with the huge backlog that quickly built up.
It will probably not surprise the House to know that mid-December is a particularly busy time for Royal Mail, as there is a substantial increase in the volume of packages and cards. Unfortunately, business continues in the build-up to Christmas for many of my constituents. I was approached by a number of small businesses and local law firms that were waiting desperately for important documents—in some cases legal documents—and that were simply unable to get them delivered by Royal Mail. Many of my constituents showed some initiative and went to the Dunfermline sorting office to see whether they could simply collect their post. However, Royal Mail had no plan in place even to allow local businesses or my constituents to do so, which is a sign of poor planning by Royal Mail management. I would be grateful if the Minister outlined what discussions he has had with Royal Mail about that lack of strategic or, some might argue, tactical thinking, which should be happening at the local and regional levels.
The backlog was such that many of my constituents did not receive the parcels and cards that friends and relatives had sent them until the middle of January, which is clearly a most unsatisfactory circumstance. To be fair, after I met Royal Mail in the build-up to the new year, it took a number of steps, including putting on Sunday deliveries, drafting in additional staff from other sorting offices and putting on extra deliveries. But, with the best will in the world, I hope that the Minister will agree that it should not have been necessary for us to reach a state of chaos before Royal Mail took proactive steps to tackle the problem.
Mr Davey
Mr Deputy Speaker, I would love to speculate on such a matter, but Madam Deputy Speaker has made it very clear that she would not wish us to do so. All I can suggest to the hon. Gentleman is that he might wish to debate that later with the hon. Member for Angus (Mr Weir) in order to get an answer to his question. He should not believe everything he hears.
Thomas Docherty
Let me take the Minister back to the point about some of the other providers, such as City Link, which he is absolutely right to say did not provide any service at all. That affected quite a lot of packages; for example, Amazon uses a non-Royal Mail provider. Will he give a cast-iron guarantee that if one of those companies tried to become the USP, it would be expected to make the same provision as Royal Mail does, and that we would not get the kind of cowboy operations that handle some deliveries now?
Mr Davey
That is the whole point of the Bill’s ensuring that the universal provision is there for us. It will be maintained, because the regulator, Ofcom, will ensure that the universal service provider meets the minimum requirements, including on performance. If a company took over the management of Royal Mail and became the USP, it would be subject to that very tough regulatory regime.
My hon. Friend the Member for Bedford (Richard Fuller) rightly praised the management of Royal Mail, led by the chairman Donald Brydon and the chief executive Moya Greene, who have made a real difference in their time at the helm; the Government have huge confidence in them. My hon. Friend asked what the incentives for management were. Having met the chairman and chief executive and having attended a board meeting recently, I assure him that its management is really seized of the need to modernise Royal Mail. Look at the way in which we have set the regime up: the Bill makes it clear that Ofcom must, when regulating, have regard to the need for the USP to become, and to remain, efficient, so there will be a regulatory framework to bear down on management—but there also are other incentives for management. He was right to make that point.
My hon. Friend also asked about the role of the unions. Royal Mail’s management and I have engaged very constructively with the Communication Workers Union, and I have already welcomed its very strong support for the amendments we are discussing today, which it recognises as strengthening the protection of the universal service that its members provide. There are, however, some difficulties. I was disappointed by the CWU’s decision to ballot for strikes in London about modernisation and I hope that the ongoing talks will prevent a strike from going ahead, as industrial action would only damage the very universal service that we are all acting to protect.
The hon. Member for Linlithgow and East Falkirk (Michael Connarty) went very wide in his remarks on the regulation. I know that he is secretary of the CWU parliamentary liaison group, and I wish that he had been on the Bill Committee, as that would have spiced things up. We had a great time on the Committee. I remember fondly the days of Red Bull amendments, Gordian knot amendments and clause 3 amendments and all the rest that we heard from the Labour party. No doubt we would also have had the Linlithgow and East Falkirk amendment if the hon. Gentleman had been on the Committee. He is particularly concerned about Lords amendment 22, on which he spent a lot of time, about the procurement determination. As I said in my opening remarks, that change has been welcomed by Royal Mail and the CWU because it provides greater certainty. I also said that people had interpreted the option of procurement decision, if there were a decision that the USO represented an unfair burden on the USP, in ways that we had not expected. We believe it is a useful tool in the regulator’s armoury to make sure that the universal service will be provided throughout the country. It is not an attack on the USP, as some people had expected. The measure is designed to ensure that the legislation is future-proofed and to make sure that the regulator has all the necessary tools at its disposal.
Let me bring my remarks to a close—