Ian Davidson
Main Page: Ian Davidson (Labour (Co-op) - Glasgow South West)Postal Services Bill
Ian Davidson Excerpts(13 years, 4 months ago)
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Ian Murray
But as we have already discussed, Germany seems to have found a loophole in that legislation, so I do not see why we should not be able to find a way forward for an inter-business agreement in this country. It would be up to the Minister and the Government to find a way around that problem and ensure that the post office network was maintained for the future.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
Is this possibly the first time on the record that a Liberal Democrat has blamed the European Union for anything?
Ian Murray
As I said in response to my right hon. Friend the Member for Rotherham (Mr MacShane), nothing astonishes me about the Liberal Democrats these days. Indeed, blaming the European Union is one of their latest wheezes as they break their pledges and proposals and change their philosophy.
The National Federation of SubPostmasters believes that a minimum 10-year inter-business agreement is essential, and it knows about the matter having worked with its members, postmasters and postmistresses across the country. That organisation, which is at the coal face, says that such an inter-business agreement would protect its members, and I think it is telling the truth in this particular matter and giving us the evidence that we need that agreement.
Today we are seeing a disgraceful privatisation of one of the country’s, and the world’s, treasures. The Royal Mail is not safe in the hands of this shameful Government, and the Bill in its current form will decimate the post office network in this country.
Chris Evans (Islwyn) (Lab/Co-op)
I support the new clause. I noticed that the hon. Member for Colchester (Bob Russell) was temporarily sitting on this side of the House a few moments ago. I thought he had crossed the Floor. If he wants to make it a permanent arrangement, I am sure we will find space for him on these Benches.
Chris Evans
Oh, we are full up, are we?
It was John Major who said that in 50 years from now Britain will still be a country of long shadows on cricket grounds, warm beer, dog lovers, invincible garden suburbs and pools-fillers. Well, he was wrong about that; I do not know anybody who plays the pools any more. He was derided at the time for that vision of the future. It was said that it was nostalgic. However, in that nostalgic vision, what he was really describing are the villages throughout Britain where the sub-postmaster and sub-postmistress underpin the community, as they know their customers and will ask, “We haven’t seen Mrs Jones for a couple of days. What’s wrong with her? Perhaps I should go round or give her a call.” We have all seen stories in the press of the times when postmasters or postmistresses have said they have not seen someone collect their pension, and they have gone round to their home and found that they were in trouble and sorted it out. Unless this new clause is passed, the British way of life—the British way of village life—will be at stake.
As we all know, the fact of the matter is that if the Royal Mail is privatised, it will not be working in favour of the community or the customer; it will be working in favour of the shareholder by selling off assets and knocking down costs. The one thing that it will say is, “We will go to the lowest bidder.” I know that Sir Terry Leahy is retiring from Tesco, but if he decides to come up with a white-label Post Office, I am sure that a privatised Royal Mail will go along with that. What will happen then to our village post offices? They will lose more than a third of their business, and that would be terrible.
We already face a problem in getting people to be postmasters. Just this week, I have heard from residents in Crosskeys, in my constituency, where the postmaster has decided to resign. They do not have a post office at the moment and are deeply concerned by the situation. What is the problem? I do not know, so I am talking anecdotally, but it may be that he is making more money from the grocery side of his business or from the national lottery distribution. A lot of people have said to me, “I make more money out of the national lottery than out of the post office.” So here is a quick idea for the Minister: if these people are making so much money from gambling, perhaps he should change the regulations to allow post offices to have one-armed bandits or fruit machines in them. Perhaps that would be one way to raise revenue.
Mr Davidson
I rise to speak as the Chair of the Scottish Affairs Committee, rather than as a constituency Member. I will therefore not explain why the construction of two aircraft carriers is absolutely vital to the maintenance of Royal Mail and the postal service.
We decided as a Select Committee that it was not appropriate for us to consider ownership or pension issues, because they were not mainly Scottish issues, but we wanted to consider particularly the future of the universal service obligation and the future of post offices, as they are of greater importance to rural and deprived areas in Scotland than perhaps they are to many other areas of the country.
We took as a given the importance of the role that post offices and Royal Mail play in the community. A number of other Members have already referred to that. Normal procedure does not necessarily mean that we cannot repeat exactly what other Members have said, but I will not do so in these circumstances. I want to move on to our recommendations on these issues.
We met the Minister and had a hearing with him, and it was generally our view that he was not nearly as bad as people led us to believe. He was sincere in his view. We all thought that he wanted to support the maintenance of the post office network and the universal service obligation. There was no doubt in our view that his heart in all this was in the right place. Unfortunately, we did, however, think that his head was a bit muddled.
The Minister and ourselves had identified the fact that the inter-business agreement was absolutely essential for the future of post offices, but we were not convinced that he appreciated the necessity to make it as firm as possible. We took the view that his good intentions, which we accepted, were not sufficient, because events might occur that submerged a host of good intentions. We have already seen the Government use the economic crisis as an excuse to ditch all sorts of commitments that both coalition parties made before the election. We therefore took the view, as Ronald Reagan did with the Russians on missiles, “Trust, but verify.” We accepted his good intentions, but we wanted to ensure that things were pinned down as firmly as possible.
We welcomed the Minister’s statement that he did not intend to put anything in the way of such an agreement. We took the view that there was a hierarchy of ways in which it could be approached. Undertaking to remove obstacles—well, not objecting to doing so in the first place—we took as a given. He indicated that he was keen to see obstacles removed. One of our recommendations is that the Minister take positive steps to facilitate a long and robust IBA and to remove any obstacle, whether practical, legal or otherwise, that may exist. Clarifying whether there are obstacles to a 10-year IBA being signed now would remove a lot of the anxiety about whether the European Union is blocking this or any other agreement.
As the second line of pursuit, we wanted a voluntarily entered into 10-year IBA agreed before any such sale. There seemed no reason from what we heard from the Minister, given that he was willing to overcome any obstacle, why a voluntarily entered into IBA could not be signed before sale took place. We said:
“We understand that this may affect the marketability of Royal Mail, but it is essential to the sustainability of Postal Services in Scotland.”
We appreciated that Royal Mail signing an IBA might affect the price that it achieved, because it might be seen as a less attractive commercial operation than would otherwise be the case. We none the less agreed that we wanted to include that because the preservation of post offices through the construction of an IBA and its implementation before privatisation or a change of ownership was absolutely vital.
Damian Collins
Does the hon. Gentleman not think that the case might be argued the other way? In taking Royal Mail to sale, one has to demonstrate that one has a secure agreement with the post office network as a major retail outlet that provides a sound footing for services at the point of sale. It is in the network’s interest in getting the best possible deal for Royal Mail.
Mr Davidson
No, we took exactly the opposite view. We accept that Royal Mail would probably want to have the post office network. That network is important to Royal Mail, but it is not utterly and absolutely essential, whereas the converse is not the case. It is a question of ham and eggs. The pig makes a much greater commitment than the hen, so we took the view that, if there were a privatised Royal Mail or a change of ownership, which is free to negotiate with post offices, it would be likely to drive a much, much harder bargain. It would seek, for entirely understandable commercial reasons, to drive the post office network into the ground as much as possible, to extract the maximum possible advantage from those negotiations, because it would not be directly responsible for the future of the post office network. That is why we took the view that the Post Office’s position was likely to be strongest before any change of ownership, so it was best agreed now, rather than later.
Richard Graham
I was not quite sure who the pig and chicken were in the hon. Gentleman’s analogy. However, on the relationship between Royal Mail and Post Office Ltd, and the role of the Treasury and the financial issue, does he not agree—and I am sure that we will all be invited to buy shares in a privatised Royal Mail, and that it will be a flotation in which many people will participate—that we would all want to see that agreement in place, so that provides the best likelihood of its happening?
Mr Davidson
No, I do not agree with that at all, because I do not believe that a structure will be established for Royal Mail that necessarily allows all shareholders to come round and cast a collective vote on whether they want to maintain a collective post office network. It will be in the management’s interests to maximise the return for the shareholders, so screwing the post offices into the ground will probably be in their interest. I am sorry if my comparison about ham and eggs, and chicken and bacon was not understood. The concept is that the pig provides the bacon, and the chicken provides the eggs. The chicken can carry on afterwards, but it is not quite as easy for the pig. I am sorry if that is beyond senior members of the Conservative party, but we are prepared to explain these things to them later.
Returning to the question of how we can secure the strongest possible commitment to the IBA, as proposed in the new clause, which the Committee had not seen when it prepared its report, we thought that having that in legislation would be an extremely strong protection. If the Minister can give us an assurance that legislation is not necessary because the same things will be achieved without legislation before there is any question of a sale, then, because we are reasonable, we would be satisfied. However, the House will understand our anxiety, because after the by-election on Thursday, the Minister might not be here any longer. We want to make sure, while he is in a position of authority, that he allows his heart to rule and produces measures that we find acceptable.
I should like to touch on one or two other worrying issues relating to the Post Office. On the size of the network in Scotland, we accept that the Government’s access criteria are helpful in setting out the structure of the network that they want. We welcome, too, the fact that they intend to keep 11,500 post offices. However, it is not the case that the access criteria necessarily mean that the 11,500 will remain, because our understanding is that the access criteria could be met with 7,500 post offices. A commitment to 11,500 is not necessarily a commitment to the 11,500 that are there at the moment. It would be possible in those circumstances for a substantial denuding of the post office service to take place in the highlands, the islands, the borders or Argyll. Rural areas could maintain the present access criteria, and the 11,500 criterion could be met because other post offices might set up elsewhere in urban areas, but the service would undoubtedly be worse than it was before.
The Minister shakes his head. I would welcome a commitment from him that the intention is to maintain the network pretty much as it is. I genuinely understand his difficulty. Individual post offices are controlled by individual private contractors. We cannot legislate to refuse somebody permission to leave. There will always be some degree of coming and going. If it were one in, one out in a particular area, we would not object to that, but there could quite easily be a couple of hundred post offices going out of the rural areas or the poor areas, and a couple of hundred starting up in the richer areas where need is perhaps less. The Minister’s criterion would still be met, but the social objectives that we are pursuing would be lost. I am happy to give way if the Minister wants to solve my problem.
Mr Davey
Philately has got me to my feet. I am looking forward to reading the Scottish Affairs Committee’s full report. I thought that I had said to the Committee that the 11,500 commitment is in the contractual agreement between the Government and Post Office Ltd. That is a strong commitment and it is backed up by the access criteria that we inherited from the previous Government, which could be delivered by a network of 7,500 post offices. Obviously, there is a debate about that, but the two together give a strong reassurance to Members and to communities around the country and meet all the concerns that the hon. Gentleman is raising.
Mr Davidson
The Committee unanimously welcomed the points that the Minister was making about the access criteria and the fact that he was guaranteeing, as I understood it, 11,500 post offices, but surely he will accept that his guarantee does not guarantee the same 11,500. It does not guarantee them in the same locations. In some areas, particularly rural areas, where there are small post offices, the access criteria are, thankfully, better met. One of those could easily close, one could open somewhere else, such as London, and both sets of criteria would still be met.
If the Minister cannot give us a commitment today, perhaps he will take that away and consider whether something could be done at a later stage in the passage of the Bill. I think that he accepts that this is a genuine anxiety and that we are here to help him. We are identifying gaps in provision and trying to strengthen the Bill.
Mr Reid
I share the hon. Gentleman’s anxieties. However, as we discussed in Committee, the problem was framing legislation to cover all eventualities. He correctly pointed out that the previous Government’s access criteria, which continue under the present Government, could be satisfied with 7,500 post offices. The only way to solve the problem would be to pass legislation that no post office could ever close, but it was agreed that that was not a practical solution. No amendment has been tabled today that offers a practical solution. The problem is putting such a solution into legislation. We have to accept the assurances of the Government. That is the only way in which we can proceed, because of the impracticality of legislating.
Mr Davidson
The hon. Gentleman serves with me on the Scottish Affairs Committee. As he will remember, we were not recommending that there should be a change to the legislation on this point. Unanimously we agreed that putting it in legislation would be too difficult, and we understood the Minister’s difficulty in identifying a policy that would encompass these points. But we wanted to raise the matter again because it was raised with us on a number of occasions by people who could see how the Government’s commitment could, in effect, continue to be met while there was none the less a deterioration in service.
The Minister has made the point that the contractors are independent. If somebody leaves a post office, somebody else will have to decide whether they want to take that on. After the next election, there may well be a number of Liberal Democrats looking for new jobs, and they may consider whether to become sub-postmasters. So, I am actually thinking of the Minister as much as anything else. He might wish to become a sub-postmaster in those circumstances, and, to return to a previous point, I am sure that he would much prefer a 10-year, or what might then be a five-year, guarantee with Royal Mail to one of only a few weeks. Again, it would be for his own good.
Sarah Newton (Truro and Falmouth) (Con)
I very much agree that the location of post offices is vital. Does the hon. Gentleman agree that responsibility for that could be given to the new regulator? The previous Government took away that responsibility, but there used to be regulation on the consultation and decision-making process that affected the location of post offices, so the Minister might consider that idea when establishing the new regulator.
Mr Davidson
That seems like a very constructive way of looking at the issue. I am not sure about the practicalities, and nobody else raised the matter with us during our discussions, so we have not introduced it as a recommendation. We were interested in the outcome, however, and we had sufficient faith in the Minister and his support staff to identify ways in which it could be achieved.
That brings me to the other point about which we had anxieties. It relates to the point about the number of outlets, and it is the issue of wandering vans. The Government have committed to a certain number of outlets, and the Minister has indicated that he wants to have 11,500, but an outlet can be a van that stops for a certain period at a location and then moves on; it does not necessarily have to be a post office.
We have already heard how some sub-post offices and outreach facilities were not considered adequate, and the hon. Member for Banff and Buchan (Dr Whiteford) described how people had to queue outside some of them in the rain and snow. The facilities were not always satisfactory, and we worry that the Government will be able to meet their target of 11,500 by introducing a number of wandering vans that go to five places a day, five days a week, meaning that 25 outlets are covered.
So, 100 peripatetic vans—to use their Sunday name—would cover a substantial number of the 11,500 outlets that the Minister identifies, and that is clearly not what we intended. It would therefore be helpful if he indicated the criteria that will apply when deciding to introduce a wandering van. Is he willing to state that there will be a maximum number? We do not want the commitment to 11,500 outlets undermined and devalued by there being not even full-time vans, but part-time vans that appear for only a limited number of hours per week. That is the final area of the proposed changes on which we want the Minister’s clarification. Again, if he does not feel able to provide it today, I hope that he will find it possible to produce appropriate statements before the legislation is finalised.
Tom Blenkinsop
I support new—cross-party—clause 2 as part of a damage limitation exercise in opposition to this Bill to privatise Royal Mail, and in order to protect Royal Mail, which Moya Greene, its new chief executive, says provides one of the most excellent services in the world.
I, like many colleagues, have major concerns that the Bill’s proposal to separate Post Office Ltd and Royal Mail will lead to significant changes in arrangements between the two entities—two that are currently one. My Opposition colleagues and I are not the only ones to have said that; the postmasters, and the Royal Mail workers and managers whom I met in my constituency over Christmas, reiterated it.
There is no known international precedent for separating a national mail operator from its retail arm, and the changes will be detrimental to post offices in my constituency and to my constituents, their customers. The changes are likely to lead to Post Office Ltd no longer being treated as a preferred and reliable in-house provider by Royal Mail. Instead, I fear that the Post Office will be seen no differently from any other supplier, with the long, shared history between the two companies overlooked and the public’s wishes for a good, complementary service disregarded.
As we have heard, post offices—especially small rural post offices in villages across the country and in my constituency—are heavily dependent on Royal Mail business for income and attracting customer visits to their premises. In the same area, our local post offices provide a convenient and trusted location to carry out Royal Mail transactions both for the general public and for our local small businesses. Many of those post offices act as village shops and sell convenience goods, groceries, sweets and newspapers. However, many of those businesses’ activities are unviable on their own without post office activity underpinning them.
Tom Blenkinsop
No, we are portraying a picture of the future in which that could happen. Royal Mail Group has admitted that nearly two thirds of existing post offices are economically unviable. That does not mean that they are not propped up by the inter-business agreement. That is the difference in how the Opposition and some Government Members view the IBA. Is it simply a system that keeps post offices alive, or is it a redistributive mechanism within Royal Mail Group, alongside other mechanisms, that ensures that there is a service provider across the UK?
Mr Davidson
Perhaps it would be helpful if we clarified whether it would be possible, without an IBA, for Royal Mail to do a deal with Tesco, other supermarkets and a number of banks, and to fill in the missing parts of the jigsaw with post offices. Surely that is the alternative that we ought to be worried about. That is the danger of going down the road indicated by the hon. Member for Folkestone and Hythe (Damian Collins). He seems to think that the option is between the Post Office in its entirety and Tesco in its entirety. A predatory Royal Mail could easily decide to pick and mix. The danger is that we would be left with a small number of post offices, with the rest replaced willy-nilly by Tesco and the like.
Tom Blenkinsop
There is also the assumption that the Royal Mail will stay at its current size and not contract wholesale to a more commercially viable size in urban areas, and an assumption that it will remain as one national system and not fracture into regional systems with further purchases and sales. It depends who the buyer is, and we have no guarantee on that either.
The importance of the inter-business agreement is demonstrated by the figure from the National Federation of SubPostmasters that income from transactions carried out in post offices on behalf of the Royal Mail accounts for a third of Post Office Ltd’s income—£343 million in 2009-10—and makes up a third of sub-postmasters’ pay and income. It is clear that if the agreement, which has almost four years left to run, is not retained and carried over, more local sub-postmasters will conclude that the game is up and hand in their keys. The arrangements under the Transfer of Undertakings (Protection of Employment) Regulations 2006 are likely to change, and the terms and conditions for sub-postmasters may change substantially. If I was a sub-postmaster in a rural area and wanted my pension or redundancy, I would see this as a dodgy area.
It may be easy for Ministers to ignore such arguments and say that there are always people who are willing to provide post office services, but from my constituency experience, that is far from the truth. When a local urban post office in Coulby Newham closed recently, the response to the advertisement of the new business opportunity was negligible. Luckily, we were able, in partnership with the regional offices of Post Office Ltd to find a business man, Mr Patel, who was willing to take the risk of opening a new outlet in Coulby Newham, but I stress that that was with the benefit of the inter-business agreement. Without it, I do not believe that he would have taken the plunge.
Any changes to Royal Mail and its relationship with Post Office Ltd that adversely impact on the network will unquestionably risk further widespread post office closures. If the Government do not heed that warning, the public and my constituents will know who to blame. Royal Mail is a great example of how the market does not solve everything. It simply does not make economic or business sense for a company to set up to provide a postal service in rural areas. That is why we need Royal Mail, why we have the IBA, and why it must remain.
Mr Davey
My right hon. Friend is absolutely right. Let us be absolutely clear: the problem with Royal Mail has been the inaction, particularly from the previous Government, that has led to its parlous state. We do not want to create significant risks of legal challenge that would undermine the modernisation and investment process that Royal Mail needs to deliver on the universal postal service and that we need to ensure that the post office network does not have to face the closure programmes we saw under the previous Government.
Mr Davidson
Could we possibly agree, first, that the EU is a bad thing? Secondly, is the Minister telling us that he does not wish to have the new clause in the Bill in case the EU steps in, while also promising us that he is going to do all this anyway?
Mr Davey
The commitment that I have given today is what the hon. Gentleman and his Select Committee were seeking. That is what I understood from his very well-informed remarks earlier. Now that he has intervened, let me tell him that his point about mobile vans is dealt with in Government amendment 5, which I hope we will get to. There are currently 39 such vans serving 240 communities, and Post Office Ltd has no plans to increase its fleet of vans. I hope that gives him some reassurance on his very detailed point.
Mr Davey
Let me anticipate the hon. Gentleman, because the concerns that the nationalist parties expressed in their amendments are unfounded. The Bill will ensure that nationalist emblems can be placed, and be required to be placed, on stamps in future. I hope that he is reassured by that.
Mr Davidson
Surely the Minister does not mean “nationalist emblems” can be placed; can he assure us that Alex Salmond’s head will not appear on any stamps provided in Scotland?
Mr Davey
I cannot tell the hon. Gentleman how delighted I am to be able to give him that reassurance. It was a slip of the tongue.
Some people have concerns about the wording of our amendments, which ensure that Her Majesty’s head will be on our stamps in future. I can assure hon. Members that, under section 10 of the Interpretation Act 1978, “Her Majesty” can be taken as
“a reference to the Sovereign reigning at the time of the passing of the Act”
and construed as applying to any future Sovereign, so people should not worry about that.
May I turn to the Post Office? There has rightly been a lot of debate about the impact of the Government’s proposals on the network of post offices. First, I want to be absolutely clear that we are talking about a sale of shares in Royal Mail, not in the Post Office. They are both cornerstones of British life, but they are different businesses facing different problems, and that is why separation has been so widely supported by the experts. Of course, their futures are closely linked, and we expect that they will always have a strong commercial relationship, but securing the future of Royal Mail will of course help to secure the future of the Post Office as the natural outlet for purchasing Royal Mail services.
I shall say again something that I have said many times before. There will be no programme of post office closures under this Government. I have been very clear on that, as has my right hon. Friend the Business Secretary. That is why we have pledged £1.34 billion of funding to support the post office network, funding that will ensure the continuation of at least 11,500 post office branches throughout the United Kingdom.