Royal Mail: Universal Service Obligation

Tuesday 4th November 2025 Westminster Hall

11:00

[Sir Desmond Swayne (in the Chair)]

I will call only Sir Ashley Fox and the Minister to make speeches. There will not be an opportunity for Sir Ashley to sum up after the debate.

[Sir Ashley Fox (Bridgwater) (Con)]

I beg to move,

That this House has considered Royal Mail and the universal service obligation.

It is a pleasure to serve under your chairmanship, Sir Desmond. It is also a pleasure to move the motion and introduce this debate on Royal Mail and the universal service obligation. This issue affects every household and small business in the country. The postal service is a vital part of our communities. Its future and the changes to the universal service obligation, or USO, particularly affect my constituents.

Our postmen and women are among the most remarkable workers in the country. Out on their routes, come rain or shine, they are often well loved in their communities. The pandemic showed us at first hand the impact that a good postie has—especially for elderly or vulnerable people who were shielding or who had little other human interaction in that period. People in rural areas rely on the service to stay connected.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for securing this debate. I also respect the men and women of Royal Mail but, in my office, one major issue has been delay. For those who are elderly, with sometimes complex and severe health problems, the mail is not arriving in time. They miss their appointments and the follow-up. The fines from Government are not working. What else does the hon. Member think the Government should do to ensure that Royal Mail is accountable to our constituents for the delivery of mail?

[Sir Ashley Fox]

If the hon. Gentleman stays, he will find that I answer most of those points in the remainder of my speech. Since 1840, the principle of the USO has been simple: everyone in the United Kingdom, no matter where they live, should have access to a reliable and affordable postal service. It is a promise of fairness. If I post a letter in Bridgwater, it costs the same to deliver to an address in Inverness as it does to one down the road in Taunton.

[Chris Coghlan (Dorking and Horley) (LD)]

I fully agree with the USO, but in some postcodes in my constituency 20% of first-class mail is delivered late. In Buckland, there is no mail service at all when the postlady is on holiday. Does the hon. Member agree that the Government must work with Royal Mail to improve service?

[Sir Ashley Fox]

Indeed. The hon. Gentleman will find that if only 20% do not get next-day delivery, they are doing better than average; that does not speak highly of Royal Mail. Since I was elected last year, many of my constituents have told me that Royal Mail is not working as it should. After hearing those concerns first hand, I visited the sorting office in Bridgwater.

In January, I ran a sample survey to ascertain the scale of the problem in my constituency. I ensured that each town and village was sampled, as I wanted to ensure that every area was covered. I had hundreds of responses. Only one in three got a delivery every day; 15% said they received post once a week or less frequently.

In North Petherton, a constituent repeatedly received a bundle of letters delivered once a week, with no Royal Mail van spotted during the rest of the week. I had a report of no deliveries in Othery for more than a fortnight. My constituents had to travel to the sorting office in Bridgwater to collect post personally. In Cossington, a constituent’s weekend magazine subscription went missing for seven weeks in a row. No one area had a wholly good or wholly bad service. In Burnham-on-Sea, 48% of respondents gave Royal Mail 10 out of 10 for reliability of service, and 30% gave it zero out of 10.

It seems that if a household is on a route with a good postie, it gets a great service, but if that route is not allocated, the letters sit in the rack for days on end with nothing happening. That is simply bad management.

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

I thank the hon. Gentleman for securing the debate. That situation has occurred at Bexleyheath sorting office in my constituency, and Royal Mail asked whether I could help advertise its vacancies. Should Royal Mail do more to try to fill vacancies on routes that are not filled?

[Sir Ashley Fox]

Indeed it should. We have evidence of poor management and, dare I say, occasionally unco-operative unions.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I have found that local post workers are really keen to innovate where they can to try to deal with the issues. One thing they pioneered was putting the NHS barcode on healthcare-related letters. Does the hon. Member agree that the Minister should liaise with his colleagues in the Department of Health and Social Care to make sure that every NHS organisation puts that barcode on so that those letters can get to the people who need them?

[Sir Ashley Fox]

I agree entirely with the right hon. Lady.

I know that there are plenty of local problems, but I also want to look at the national picture. In the first quarter of this financial year, Royal Mail’s performance under the existing USO targets fell well short of expectations. The target for first-class deliveries is 93%, meaning that 93% of first-class post should arrive the next working day. In practice, Royal Mail managed only 75.9%. For second-class deliveries, the target is 98.5% delivered within three working days, yet only 89.3% were delivered on time. That is millions of items delayed across the country. When we look at daily deliveries, the story is even more concerning.

In 2024-25, the proportion of daily routes that were delivered was 87.8%. That is against a target of 99.9%. On any given day, more than one in 10 routes were simply not delivered at all. That explains why locally, even within a small village, some people appear to get a good service while others get next to no post at all. A constituent in Spaxton wrote to me to let me know that his postie had complained of severe staffing shortages and that the new contracts being offered were making the jobs unattractive to new starters.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

I wrote to the Post Office in July, three and a half months ago, and it emailed a response this week—I think three and a half months might be a record. The posties in the west highlands, a very rural area, get paid an amount of money that is not attractive to them. We have areas in Wester Ross and Skye that are getting no post at all and have not for some weeks. Does the hon. Member not agree that the Post Office should use the flexibility that it has to pay a reasonable sum to attract postal staff?

[Sir Ashley Fox]

Yes, I agree. We can all agree that Royal Mail faces real challenges. Many people now communicate primarily online and fewer letters are sent, which impacts revenue.

[Apsana Begum (Poplar and Limehouse) (Lab)]

I refer to my entry in the Register of Members’ Financial Interests. The hon. Gentleman mentioned the unions earlier. We could perhaps acknowledge that the Communication Workers Union has called out the clear mismanagement of the senior leadership and the need for Royal Mail to fix its recruitment retention crisis.

Does the hon. Gentleman not agree with me that the issue is much wider across the sector in that it is vastly unregulated, creating an advantageous environment for parcel couriers such as Amazon? That has an impact on Royal Mail’s ability to deliver its services when it is being fined by Ofcom. Some see that as a very punitive measure, given that Amazon and other parcel couriers carry on unregulated and make no contribution to the universal network itself. They hive off profits and pay workers a pittance.

[Sir Ashley Fox]

I am grateful to the hon. Lady for reading out the Communication Workers Union press release. I did refer earlier to bad management and occasionally militant unions. I think good management will overcome the problems, but I do not think the solution lies in more regulation of other private operators. I want to make a little progress now.

The national figures that we see represent a consistent decline in performance over several years, despite the clear legal and moral obligations that come with being the nation’s postal service. Ofcom has noticed. In 2022-23, Royal Mail was fined £5.6 million for failing to meet its delivery targets. The following year, 2023-24, the fine almost doubled to £10.5 million. In 2024-25, it more than doubled again—a staggering £21 million penalty for failing to deliver the service that the public expects and deserves.

In the face of mounting pressures, changes to the USO have been adopted. I must admit that I am sympathetic to some of the arguments that have been made. If I asked many of my constituents whether they would rather have post delivered consistently every other day, they would gladly accept, but I worry that that will not happen.

Under the changes being discussed, the number of delivery days would be reduced, meaning fewer days on which post must actually be delivered. But that is not all. The performance targets have been watered down. On first-class mail, the target is set to drop from 93% to 90%. For second-class post, the target drops from 98.5% to 95%. The post will now come less frequently and Royal Mail expects to deliver even less of it on time.

In my local survey, residents scored reliability at an average of only five out of 10—some, of course, scored as much as 10, and others, zero. They already experience an unreliable service. These changes will not improve either the perception or the reality.

Let us be clear about what the situation means. This is not just a few percentage points on a chart; it is millions of people waiting longer for vital letters—legal documents, hospital appointments, prescriptions and personal correspondence. It is small businesses waiting an extra day or two to deliver goods. It is rural communities, already struggling with connectivity and transport, being pushed further to the margins. It also sets a dangerous precedent: instead of holding Royal Mail to the standards it has committed to, we simply move the goalposts to make failure acceptable.

A constituent in Bridgwater complained that his letters were being delivered in bundles of 16, 18 and, once, 23 at a time, and up to four weeks late. Does the Minister think these changes will reassure that constituent?

The Government and Ofcom need to remember that the universal service obligation is not just a technical regulation; it is a public promise. It is what makes Royal Mail more than just another delivery company and gives it a unique place in British life. Reducing delivery days, reducing targets and accepting lower standards risks eroding that promise. Once lost, it will be incredibly difficult to restore.

It is important to ask ourselves what message is sent when a national institution misses its targets so widely, is repeatedly fined, and instead of being required to improve, is allowed to relax the very standards it is meant to meet. If the argument is that letter volumes are falling, which they are, let us have an honest conversation about how that service can adapt. Right now, targets are being missed and the answer should not be, “Water down the targets until they are met.”

Royal Mail’s decline in performance is not inevitable. It is the result of choices about investment, priorities and accountability. The choice before us now is whether we accept decline or demand better. I urge Ofcom, the Government and Royal Mail to consider whether the changes, in the long term, will really improve services. Or do they, in fact, represent another step backwards?

The last time this matter was debated in Westminster Hall, in 2023, the hon. Member for Feltham and Heston (Seema Malhotra), who was then the shadow Minister for business and consumers and is now a Minister in the Foreign Office, said that

“Labour is committed to the universal service obligation as the company’s central mission. The next Labour Government will want to ensure that the USO is secure for the future and continues to be provided by Royal Mail in a way that is affordable and accessible to all users…We will also strongly oppose any attempts, whether by the Conservatives in the future or by the leadership of Royal Mail Group, to weaken or abandon the USO.”—[Official Report, 12 January 2023; Vol. 725, c. 324WH.]

Does the Minister agree with his hon. Friend? What do the Government think of these changes? Has Labour forgotten the promises it made only two short years ago?

I conclude by referring once more to my local survey. Of those who did not use the postal service regularly, over a third said that was because it was too slow or too unreliable. My residents already consider the cost of posting a letter to be too expensive. The new system risks being slower, more expensive and less reliable. That is not a way to attract new custom. In April 2025, Royal Mail was acquired by the EP group, a Czech-based company owned by Daniel Křetínský. I wish the new owners well, and hope that the acquisition leads to improved levels of service and efficiency so that we have a postal service that serves everybody, everywhere. Mr Křetínský can be assured that we will watch him very carefully.

11:15

[The Parliamentary Under-Secretary of State for Business and Trade (Blair McDougall)]

It is a pleasure to serve under your chairmanship, Sir Desmond. I congratulate the hon. Member for Bridgwater (Sir Ashley Fox) on securing this important debate on Royal Mail and the USO, an issue that matters deeply to households and to businesses across the country. Royal Mail is an iconic part of the UK’s infrastructure. The postie remains a familiar part of every city, town and village, providing a vital service to communities around the country. As other hon. Members have done, I pay tribute to the dedication of posties. I know, from spending time out on delivery with posties from the Barrhead sorting office in my constituency, the care that they have for their customers, and particularly their vulnerable customers. The USO underpins the network, guaranteeing that letters and parcels can be sent anywhere in the UK at a uniform price, six days a week. That principle ensures that businesses can reach customers nationwide and that families can stay connected.

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

I represent a partly rural constituency, Morecambe and Lunesdale, so my constituents rely on the universal service obligation. They also rely on regular mail deliveries for vital information such as hospital appointments. But my constituents, particularly in villages like Endmoor, are suffering with irregular and delayed deliveries. Does the Minister agree that my rural constituents deserve a good postal service, and that Royal Mail should focus on delivering one? What steps is the Minister taking to secure that service?

[Blair McDougall]

My hon. Friend makes an essential point about the importance of the postal service in rural areas. The hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) made that point as well. I know from my relatives in highland areas how essential that connection is. My hon. Friend raises the issue of NHS appointment letters—that point was also raised by my right hon. Friend the Member for Oxford East (Anneliese Dodds) and the hon. Member for Bridgwater. The trials of barcodes on those letters have been very successful, and I am happy to continue discussions with the Health Secretary to make sure that those barcodes are rolled out as widely as possible.

[Patricia Ferguson (Glasgow West) (Lab)]

I am grateful to my right hon. Friend the Member for Oxford East (Anneliese Dodds) for raising the issue of the barcodes. Royal Mail representatives came before the Scottish Affairs Committee when we wanted to discuss with them the problem of deliveries in rural and highland areas. They were particularly proud to talk about the barcode idea, but seemed to be concerned that perhaps in Scotland there was not the same alacrity in adopting that sensible suggestion. Given the Minister’s knowledge of the geography of Scotland, which is at least as good as mine, is that a point he might want to take up with colleagues in the Scottish Government?

[Blair McDougall]

I certainly will. As I mentioned a moment ago, the more dispersed geography of Scotland means that the postal service is often even more of a lifeline in our part of the world. I will certainly follow up that point with Scottish Ministers, and with colleagues in the Department of Health and Social Care. On the future of the universal postal service, I reassure the hon. Member for Bridgwater that we remain committed to a comprehensive USO that is financially sustainable and efficient, and that meets user needs within the open and competitive market. That is why the six-days-a-week, one-price-goes-anywhere universal service remains at the heart of the regulatory regime that is overseen by Ofcom, but of course the universal postal service faces challenges, as many Members have said.

[Alex Mayer (Dunstable and Leighton Buzzard) (Lab)]

It is also important to get letters into the postal service in the first place. In Bidwell West, which is in my constituency, residents face a 30-minute walk to the nearest post box. That is because Royal Mail refuses to put in new post boxes on unadopted roads, despite the fact that the developer is perfectly happy for there to be a new post box. Would the Minister consider raising that with Royal Mail?

[Blair McDougall]

I can certainly do that. Through Ofcom, Royal Mail has obligations in terms of the accessibility of post boxes, and I will raise my hon. Friend’s point with the chief executive of Royal Mail when I meet with him next week.

The challenges faced by Royal Mail are shared in most European countries, which are taking steps to reform their USOs. On 10 July, Ofcom announced reforms to put the USO on a more sustainable footing, and to push Royal Mail to improve reliability. However, changing those obligations alone will not be enough to guarantee a better service, so today, Ofcom has launched a call for input as part of its ongoing review of affordability, which will inform its consultation early next year. Reform of the USO is an ongoing process, which is being undertaken by Ofcom, the independent regulator, so I will not directly insert myself into that. However, I will certainly make sure that the voices of hon. Members are heard, widely and clearly.

Many Members raised issues relating to the quality of service. Experiencing delays is so frustrating, as many Members said. That is why, when EP took over Royal Mail, we secured the commitment through our golden share that before its new owners take value out of Royal Mail, quality of service must improve. Ofcom has powers to investigate and take enforcement action when failures in quality of service are identified, as it did recently when it fined Royal Mail £21 million for contravening its service conditions in 2024-25. Ofcom has told Royal Mail that it must urgently publish a credible plan that delivers significant and continuous improvement.

The changes to the USO that I referenced earlier include changes to Royal Mail’s quality of service targets, as the hon. Member for Bridgwater mentioned. They are intended to enable the business to more predictably deliver mail without delays, but I share his view that flexibility must ensure reliability, rather than lowering ambitions. Ofcom has committed to closely monitoring Royal Mail’s performance, and to ensuring that it meets the business regularly to have those conversations. It is evident from the contributions of hon. Members across the Chamber that Royal Mail’s quality of service has not been good enough. The Government have discussed that with the chief executive of Royal Mail, and I will do so again on behalf of the hon. Members who have raised issues today.

I will return briefly to the subject of the constituency of the hon. Member for Bridgwater. I know that there have been service issues because of resourcing difficulties in the Bridgwater, Burnham-on-Sea and Taunton delivery offices. I understand that Royal Mail is now actively recruiting staff to deal with that. Again, I will discuss that with the chief executive of Royal Mail next week. Royal Mail has publicly committed to delivering improvements to its quality of service, and is taking action to recruit additional frontline staff, improving delivery office efficiency and simplifying the network to make it more reliable and resilient. I am encouraged to see that Royal Mail is recruiting 20,000 temporary workers across the country to help deliver the Christmas items that we all expect during that peak period.

As I have set out, the Government remain committed to ensuring the provision of a financially sustainable and efficient universal postal service, one that is accessible and affordable for customers, and that works for workers and businesses. I fully recognise that delays in postal deliveries can have serious consequences for those, including small businesses, who rely on the post for important information. Now that Ofcom has made changes to the USO specification to ensure a modernised service, we need Royal Mail to work with its workforce and unions to deliver the service that we expect.

I hope that hon. Members will see Royal Mail’s service quality improve in the months and years ahead, but rest assured, I will continue to work with Royal Mail and Ofcom to make sure that that is the case. I emphasise that whatever criticisms we might have of Royal Mail, and whatever concerns we might have about the quality of service, we, across the House, are so grateful for the quality of service and the commitment of individual posties, who are an absolute lifeline to communities up and down the country.

Question put and agreed to.

11:25

Sitting suspended.