Alan Reid
Main Page: Alan Reid (Liberal Democrat - Argyll and Bute)(10 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Dan Rogerson
Absolutely; the hon. Lady is quite right.
Many hon. Members have visited the North Cornwall constituency, including the Prime Minister. Some Members may have seen the pictures in the national media. [Interruption.] He is braver than I am; I would not want to see pictures like that of me in the national media. However, we welcome him and his contribution to the local economy. There are many hamlets within the 65 parishes, so we are talking about lots of communities. If people visit the rural communities of North Cornwall, they will see lots of cottages with the name “The Old Post Office” on them. That is a mark of how many post offices we have lost.
During the last Parliament, from 2005 to 2010, we received a tough deal under the post office closure programme. For example, many of the villages around Bude lost their post offices. They are still suffering from that. I could point to a number of successful voluntary schemes that have brought back local community shops and post offices. The scheme in Blisland predates the closure programme. The community there came together and provided an excellent facility that has an internet café as well as a shop and a meeting place. In St Tudy, where the post office closed, the community recently got together to apply for funding for a new building. That went up incredibly quickly, which is testimony to the hard work of the community. In other places, the publican has provided the post office. The Tree Inn in Stratton, which again is near Bude, has brought the post office back to the community of that market town.
Mr Alan Reid (Argyll and Bute) (LD)
I agree with my hon. Friend on the importance of local post offices. Does he agree that the Department for Work and Pensions has an important role to play by giving business to the Post Office? It is essential that the Post Office card account contract continues and that post offices are used as places where people who do not have access to the internet can apply for universal credit. Does he agree that it is important that the DWP gives that work to the Post Office?
Dan Rogerson
Ministers have felt under pressure to ensure that they provide a level playing field to all people who want to provide such services, but there is no question in my mind that only the post office network has the reach to provide services such as the Driver and Vehicle Licensing Agency contract and to tick all the boxes in terms of accessibility.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
I congratulate my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) on securing this debate. I wish, like others, to contribute because a large part of my constituency covers a rural area. I have two rural post offices out of a total of eight across the constituency, which is the lowest number of post offices of any Scottish constituency aside from Glasgow North and one of the lowest in the UK as a whole.
The post is a vital service in rural areas. It goes beyond merely putting mail through the letterbox. For example, people who are not naturally gifted at form-filling can get help at competitive prices from the post office on a range of official documents, including passports, driving licences and tax discs. The post office will check the photo and form for a new driving licence for £4.50; by contrast, private companies offering similar services online can charge up to £60 for passport checking. The difference is between a public service at a modest cost and the free market charging whatever it thinks it can get away with.
When public services began to be privatised back in the 1980s, the mantra from many who occupied the Government Benches at the time was that competition meant a better deal for the customer. However, let us look at some recent examples. The privatised Thames Water makes profits of billions of pounds but surcharges Londoners for upgrading the sewer infrastructure in the city. The energy companies, including British Gas, have put household fuel and electricity costs up to an unacceptable level in recent years—not something they are keen to tell Sid about. The railway companies are allowed to get away with above-inflation fare increases when passengers have to tighten their belts and suffer a drop in their incomes. There cannot be many people left apart from some on the Government Benches who believe that privatisation always means a better deal for the general public.
Mr Reid
The hon. Gentleman is right to criticise the private energy companies, but Royal Mail has been guilty of excessive price increases. Royal Mail, which is under public control, put the price of a stamp up from 36p to 50p last year. Both public and private organisations are equally guilty.
Mr McCann
Yes, but under Royal Mail, we maintain the concept of universal delivery. As the hon. Gentleman has made clear, Royal Mail is profitable—it is earning the country money—which is why, instead of a having a one-off pre-election bonus through the sale of services, the UK should enjoy a regular income from post office services throughout the country.
If privatisation is the trend, will there be other royal privatisations? Can we look forward to the McDonald’s civil list, the Starbucks Duchess of Cambridge, or the Mitchells and Butlers Windsor castle? After all, the latter company already has hundreds of Windsor Castles, so it would only be a consolidation of the brand.
I have said those things in jest, but there is a serious point. A line must be drawn on how far privatisation is allowed to go. Everyone, including the Government, agrees that some things simply cannot be put up for sale. Honours such as peerages fall into that category. Parliamentary seats are legally immune from sale. The Prime Minister’s dinner table ought also to be exempt, although there are reports that donations to one Government party can get people through that front door. The argument is about whether or not postal services are a proper candidate for selling off. I and many other right hon. and hon. Members do not believe that the case has been made. Perhaps it is worth looking at the debate from the other side.
Recent complaints from the head of Royal Mail, Moya Greene, about remuneration for higher executives in the service, suggest that one priority for a privatised postal service will be significantly better pay for those in senior management positions. I am sure that Moya is still smarting from having to agree to hand back the £250,000 she received to get on the UK housing ladder, on top of the £127,000 she receives annually in relocation payments. Marie Antoinette’s riposte, “Let them eat cake” comes to mind. Are those sorts of increases really what the country wants to see—and pay for—at a time when most families have suffered a drop in income as a result of the economic climate?
The evidence does not back up the case for selling off postal services, so what is the real reason behind the Government’s enthusiasm for these projects?
Ian Murray (Edinburgh South) (Lab)
I thank the Backbench Business Committee for selecting the debate. I especially thank my hon. Friend the Member for North Ayrshire and Arran (Katy Clark), who has been dogged over many years in speaking against the privatisation of Royal Mail and pointing out its impact on her rural constituency. I hope that hon. Members will forgive me if I do not mention everyone who spoke because time constraints mean that we must rattle through the debate.
With perhaps only a few weeks to go until the Government hammer the final nail in the coffin that will seal the privatisation of Royal Mail, this has been a crucial opportunity to debate the impact of that policy on rural communities throughout the country. Such communities have already been hit hard by the Government. Whether through their astonishing abolition of the Agricultural Wages Board without a debate in the House or their inaction on rising travel and fuel costs, or with the disproportionate effect of the cost of living crisis on rural communities, the Government have been found wanting, and we now have the ideologically driven fire sale of Royal Mail to save the Chancellor’s blushes. It is only a few months since the rural economy index concluded:
“Rising unemployment, shrinking profits and plummeting confidence in countryside businesses has thrown the rural economy to the brink of a further recession”.
There is a fear that the privatisation of Royal Mail and other changes to postal services will accentuate that decline.
We should praise postal workers throughout the United Kingdom for their work. They get important mail and items to families and businesses up and down the country come rain, hail, shine or snow. We should especially thank those workers in the most remote parts of the country, which is why the motion is right to cite the
“vital contribution that Royal Mail makes to rural areas”.
Royal Mail’s profits, which are in excess of £400 million, are a testament not only to the hard work of its staff, but to the partnership of management and staff working with the trade unions to make the Royal Mail service the best that it can be.
The universal service obligation of one price anywhere, six days a week, gives equity to rural areas and supports rural economies. We have only to look at the inequity of pricing for delivering parcels to certain remote areas, which many hon. Members cited, to see the potential for rural economies to be hit hard should the USO principle be undermined.
The social aspect of the post office network in rural areas is critical. Post offices act as a focal point for communities and provide a vital service, especially for older people, as my right hon. Friend the Member for Neath (Mr Hain) said. Of course, they are also important to the small businesses that use our postal services.
There are undoubtedly challenges, given that letter volumes are falling drastically and maintaining the USO is expensive. However, the maintenance of the USO is at the crux of the debate. The Government cannot guarantee either the USO or the inter-business agreement with the Post Office because they have no real control over rival end-to-end operators cherry-picking more profitable services, which in turn makes delivering the USO more expensive. A more expensive USO puts pressure on a privatised Royal Mail to cut costs, and the most expensive parts of its business are its rural operations.
Neither the Minister nor the Royal Mail can tell us what will happen if everything goes wrong. If the USO becomes too expensive to deliver or if the privatised Royal Mail just hands back the keys to the Government, as the private companies did when their contracts failed on the east coast rail line, what will happen? The taxpayer will pick up the tab. The situation is compounded by the fact that the Royal Mail has much higher service standards than rival deliverers. It therefore faces higher standards that are more expensive to deliver, and pressure on its most profitable parts from rival companies operating under lower service standards and employing staff under worse working conditions, as my hon. Friend the Member for North Ayrshire and Arran said, to make their services cheaper still. Combined with that is an ever-more expensive USO, pressure on the inter-business agreement with the Post Office and the fact that the Government have no strategy on how to protect the USO in the long term. Then there is the big question of the EU directive, because will the UK be in the EU? Does the Prime Minister want to repatriate in this area, and will that create further uncertainty about the universal service obligation? This is a recipe for disaster, and the effects will be hardest felt in rural areas.
It would be naive to think that any new owner of a privatised Royal Mail would not aim to maximise shareholder value. That will put pressure on reducing costs and on services that might be considered uneconomic, such as reaching remote areas. Rural businesses might well have to pay more to have their mail delivered, while getting parcels from online retailers could come at a premium for householders. We have heard that a survey by Citizens Advice Scotland found that 84% of people living in the remotest parts of Scotland have been refused delivery by a non-Royal Mail carrier.
The importance of the post office network to rural communities is shown by statistics from the National Federation of SubPostmasters saying that 55% of post offices are in rural areas and that 31% are the only retail outlet in some areas. As the hon. Member for North Cornwall (Dan Rogerson) said, such post offices are often how rural communities access the wider world. The post office network depends on Royal Mail for more than 30% of its income, so we can see why there are considerable concerns that the 10-year inter-business agreement will fall. First, it was included in the Postal Services Act 2011 only after Labour and stakeholder pressure. Secondly, it can be reviewed in five years and, thirdly, it can be altered if there are material adverse effects on either of the two companies. It is a vital link in the sustainability of the post office network.
The Post Office is in a precarious position. A recent survey by the National Federation of SubPostmasters found that operating costs were rising; personal drawings for sub-post masters had fallen by 36% in four years; one in four sub-postmasters took absolutely no salary from their post office income; and most sub-postmasters earned little or no income from financial or Government services—the two areas that Ministers identified as having “real growth potential”. Most importantly for this debate, the Government have completely failed to deliver their pledge to make the post office the “Front Office for Government”. Do hon. Members remember that mantra? That has resulted in the NFSP withdrawing its support and saying that the privatisation of Royal Mail could fundamentally impact on the viability of the post office network, as it has become increasingly dependent on Royal Mail for business.
Then there is the impact on rural areas of the roll-out of the Post Office Local programme. Groups such as Consumer Focus—now Consumer Futures—say that there is a lack of analysis by the Government on how the programme will ultimately work. The Countryside Alliance is concerned that the model could result in many rural communities losing their post office or seeing further cuts in services such as manual cash deposits and withdrawals, manual bill payment services, and on-demand foreign currency. That is particularly worrying, given that the NFSP has shown that 43% of older people in rural areas use the post office to access cash.
Ian Murray
The day I take lectures from a Liberal Democrat in the Chamber is the day I leave the Chamber in utter shame. The key thing that the hon. Gentleman tends to forget is the fact that privatisation of Royal Mail will signal the final nail in the coffin for the post office network. The Government can trumpet mutualisation as much as they want, but the fact that they have kicked it into the long grass until 2016 shows how undeliverable it is. Why on earth are the Government talking about mutualisation for the post office, but are hellbent on privatising Royal Mail? Those two things are just not compatible.
By continuing to pursue a policy that is ideologically driven, quite simply, Ministers and the Government are playing politics with the postage stamp. Let us be quite clear: this has nothing to do with postal services or the impact on the public, but is meant to save the blushes of a discredited Chancellor. Why are the Government not listening to the voices of the coalition of opposition, as mentioned by my hon. Friend the Member for Clwyd South (Susan Elan Jones), including the Countryside Alliance, the National Pensioners Convention, the Scottish Family Business Association, the National Federation of SubPostmasters, the Conservative right-wing think tank, the Bow Group, the cross-party Select Committee on Business, Innovation and Skills, and even the late Baroness Thatcher? A recent survey by the Communication Workers Union showed that 96% of Royal Mail staff were against privatisation on a massive 76% turnout, despite the Government bribe to give them shares. If the Government do not want to listen to all those people, why does the Minister not listen to her colleague, the right hon. Member for Sevenoaks (Michael Fallon), who took responsibility from her to privatise Royal Mail in the recent ministerial reshuffle? He said in a letter to the CWU on 11 February 2009:
“I certainly do not support the...plans for privatisation.”
Why does that Minister not even listen to himself?
The British public, who are against privatisation 2:1, recognise that, and the Liberal Democrat manifesto—remember that document?—recognises it. The weakness of the Government’s case is absolutely clear. I say this quite seriously: Government Members who represent rural constituencies should think carefully about privatisation of Royal Mail, which they support, and how it will affect not just their constituents but the businesses in their constituencies that rely heavily on the post office network. Rural areas, more than most, rely on our much-cherished postal services. The overwhelming case is to keep Royal Mail in public hands and protect postal services for all our communities.