Royal Mail: Performance

Andy McDonald Excerpts

Wednesday 18th March 2026 Westminster Hall

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

Over the past week, the delivery offices that serve Middlesbrough and Hartlepool have both been ranked in the top five in their regional area for delivery failure. This matters for customers waiting for vital posts and for staff under immense pressure. It is not the fault of the posties; the responsibility lies with the owners. Poor decisions have created a weakened system, chaotic revisions and a recruitment crisis driven by low pay and worse conditions for new starters. The result is a workforce that is overstretched and a service that is letting customers down.

As for the USO, the six-day delivery remains a vital national guarantee, but changing specifications alone will not fix a service that is being run down. Ofcom has allowed an uneven playing field when it comes to competitors, such as Amazon, that benefit from the universal network without contributing to its cost. Royal Mail carries the burden of serving over 30 million addresses while others extract profit.

My right hon. Friend the Member for Oxford East (Anneliese Dodds) made a good point about bogus self-employment among competitors. If we do not get this right, we will undermine the impact of the Employment Rights Act. That is why the CWU is right to call for a universal service fund so that all operators contribute fairly to the network they rely on.

Ofcom’s broader approach risks a race to the bottom—it is not pursuing efficiency. If we are serious about improving performance, we have to have a fundamental rethink. I have raised this with the Minister on previous occasions, and I raise it again today. This is a mess and it is collapsing. An obvious solution is staring us in the face: take Royal Mail back into public ownership, and do it quickly.

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[Charlie Maynard (Witney) (LD)]

It is a pleasure to serve under your chairship, Mr Twigg, and I thank the hon. Member for Exmouth and Exeter East (David Reed) for securing this important debate.

I also thank my hon. Friends the Members for Sutton and Cheam (Luke Taylor), for Eastbourne (Josh Babarinde) and for Yeovil (Adam Dance) for highlighting all the impacts on their constituents, in the form of missed medical appointments, financial appointments or legal appointments. Exactly the same is true in my Witney constituency. Obviously, I speak for the whole Chamber; we are all getting correspondence about this issue in our mailbox, because it is causing so much trouble. The other thing that has come out so strongly in this debate is the stress, the distrust and the unfairness that the posties themselves have to live with. That situation causes a huge amount of unhappiness, but there seems to be no end to it in sight, which is a real problem.

The turnover rate of new Royal Mail employees is extremely high and the work practices are harsh. Yet we rely on our local posties, and almost without exception they take their responsibilities extremely seriously. I will give a particular shout out to my postie, Tony, who on Christmas eve worked way beyond his scheduled hours. He should not have had to do that and should have been paid for it. However, he is representative of everybody working for Royal Mail around the country, and that situation does not just happen on Christmas eve; it happens week in, week out.

The work practices are just getting tougher and tougher. That comes out in the latest quarterly report, which makes for miserable reading. For example, delivery targets were not met in a single postcode across the first three quarters of 2025-26. In Oxfordshire, just 67.2% of first-class mail arrived, against the target of 93%.

In October 2025, Ofcom fined Royal Mail £21 million, saying that it urgently needed an improvement plan. However, five months later Royal Mail is still saying that it cannot publish that plan until talks with the postal workers union—the CWU—conclude. All the while, our constituents and our posties are left paying more and suffering more for an inadequate and wholly unreliable service.

[Andy McDonald]

Was privatisation a mistake?

[Charlie Maynard]

I have been here for 17 months. We could rehash things from 14 or 17 years ago. I believe that in 2009 the Labour Government sought to take a 30% stake out of the Royal Mail, but I am not interested in going back through that because we are where we are. Let me try to finish my speech, and I will talk about where I think we should be heading now.

The Government and Ofcom need to urgently make it clear to Royal Mail executives that they must get a grip on the situation. Although letter numbers have fallen, there is still plenty of demand for Royal Mail’s delivery services. Crucially, everyone across the country and all of us here in Parliament place huge value on retaining the universal service obligation. What seems clear is that the incentives are wrong.

The new owner of Royal Mail is a commercial operator that bought International Distribution Services, the holding company of Royal Mail, in June 2025 with a full understanding of the Royal Mail’s USO requirement. The business seems to be prioritising its profitable parcel business, General Logistics Systems. The owner also has a clear commercial incentive to cut costs on the Royal Mail side of the business and to keep lobbying Ofcom to continue to loosen the USO requirements even further. Such a strategy serves the owner of Royal Mail very nicely, but is a terrible outcome for the many millions of people up and down the country who depend on the USO, and for the posties.

I am sure the Minister and Ofcom recognise that predicament and also recognise that the USO is a key public good. I am interested in the extent to which the Minister considers the situation similar to or different from the telecoms industry levy, which is used to fund the broadband universal service obligation. Does the Minister agree that insisting on much clearer operational transparency from the Royal Mail would be good to establish more detail on whether parcels are being prioritised over letters and the impact of that? It could be managed by Ofcom requiring root-level data on delivery performance and clear reporting on parcels versus letters prioritisation to make it harder for USO traffic to be quietly deprioritised. What steps is the Minister considering taking to stop a situation where Royal Mail keeps trying to bounce Ofcom into cutting the USO further?

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[Blair McDougall]

Obviously, part of ensuring that the obligations around postal votes are maintained is making sure that the resource is there on the ground to do that. Another part of it is also the prioritisation of postal votes within the service. There are existing structures for that, such as doing sweeps of boxes. I reiterate that the Government will continue to hold Royal Mail to account, will support strong and independent regulation by Ofcom and will press urgently for the improvements that customers rightly expect to see.

[Andy McDonald]

Just before the Minister sits down, can he help me with a couple of things? The reduction in terms and conditions for new entrants into our sorting offices is causing great problems. People are leaving within days and weeks, so there is an issue there. Similarly, in this competitive landscape, we have other providers working on the basis of bogus self-employment. Given that we approach this issue on a whole-of-Government basis, rather than just in silos, I wonder whether we are looking closely at the damage that this situation is causing. I think particularly of the £10 billion that goes uncollected through bogus self-employment, which could enhance the coffers of the Treasury, among other things, and provide people with secure and solid work. As it stands, we have insecure and fragile work, both in Royal Mail and in the private sector that competes with it. Surely this is the worst of all worlds. A thorough approach is needed. I am yet to hear the Minister tackle the key issue raised by many hon. Members from the Government Benches: that we should be looking at the option of public ownership. Will the Minister please address that?

[Blair McDougall]

Our focus at the moment is on getting the business on to a sustainable footing. That is about the negotiations on the very terms and conditions that my hon. Friend raises. As I mentioned, Ofcom has put on notice those other parcel providers. That is primarily about the poor quality of service that we see from many of them, but when we talk to Royal Mail and the union—as I am sure my hon. Friend has done—they will point out that sense of better employers being undermined by those working practices. He has been a constant campaigner in that respect.

I thank all hon. Members for their contributions to today’s debate. I reassure them that the specific localised issues that they have raised will be covered in ongoing engagement with Royal Mail and Ofcom, along with the bigger structural conversation with the union and owners. I close by again paying tribute to the posties who do an extraordinary job across the country, and stress again that none of the criticisms today are laid at their door.