Royal Mail and the Universal Service Obligation

Beth Winter Excerpts

Thursday 12th January 2023 Westminster Hall

[Beth Winter (Cynon Valley) (Lab)]

Royal Mail and the universal service obligation force us to ask questions about public services, public ownership, privatisation, and the current industrial disputes about pay and terms and conditions in workplaces. Royal Mail is a public service, and the USO, with the six-day delivery service, stamps on it the fact that it is and should be a service for everyone, but it is now operated in the private sector.

The management are operating to maximise their profits and slash services, and are disbursing those profits in dividends to private shareholders. They have paid so much in dividends that they now claim they cannot pay staff and need to significantly reduce their terms and conditions. Other comrades here today have already exposed the grotesque profits that have been accrued—billions in the past decade—and paid out in dividends to shareholders.

At the same time, Royal Mail is pleading poverty and saying that it cannot pay workers a fair and decent wage. It is offering a below-inflation pay offer, which is absolutely unacceptable and abhorrent. That is why we have had 18 days of industrial action. I want to express my full support for and solidarity with those who have been forced—it is not a choice—to take strike action. I have spent many days with members in the delivery office and on the picket line in Aberaman. I congratulate them, because they have had to do this in very difficult circumstances. The CWU branch rep in south Wales, Jason Richards, is doing some outstanding work.

I recently wrote to the Secretary of State about Royal Mail’s financial management of the business and its approach to meeting the USO for postal deliveries, and I have not received a reply. I would like to know why not.

I am mindful of time, but I want to pose some questions to the Minister. First, how can it be that the IDS board led the company to the brink of financial disaster just six months after reporting profits? How is that acceptable, given that it has been entrusted to run what is still a vital public service? If the Royal Mail chair and the CEO can tell The Daily Telegraph that the company has built up a £1.7 billion war chest to invest in the business, how can it then tell the CWU that it has debt and liquidity issues? What does the Department think of that financial management, and is the Minister taking steps to launch an inquiry, as others have already asked?

Can the Government explain the reasoning behind allowing a private equity firm, Vesa Equity, to acquire a controlling stake in the UK’s primary postal service provider, potentially leading to a full takeover and likely asset stripping of this critical national infrastructure? Does the proposed move to a five-day delivery service not demonstrate that the Royal Mail’s commitment to the USO is now broken, and that it wants to change a public service into the truly private, profit-led and cash-cow enterprise it would prefer Royal Mail to be?

My final question is this. With nearly 70% of the public in support of bringing Royal Mail back into public ownership, have the Government considered that option and how it could boost economic growth and opportunity, while providing secure, well-paid jobs for workers in everybody’s communities, rather than the current proposal to cut jobs and shift to a gig economy of self-employment? I will finish by reiterating my message of solidarity. I give thanks to CWU—I know that we have officials in the Public Gallery—which provides such a vital link within our communities. They truly do deserve a better deal. Solidarity to them.