Universal Postal Service

Lord Hain Excerpts

Thursday 17th July 2014 Commons Chamber

[Katy Clark]

My hon. Friend is absolutely right. Many predicted that we would face this problem. Indeed, we are here to give a warning that it is already beginning to happen and that action is necessary now—we do not have time to wait. He is absolutely correct that that action is required whether Royal Mail is in the public sector or the private sector—given that most of it is not held by the Government or the work force.

[Mr Peter Hain (Neath) (Lab)]

I very much support my hon. Friend’s argument. I wonder whether, early in the morning a couple of weeks ago, she heard the interview on Radio 4’s “Today” programme with a business analyst who predicted the end of the universal door-to-door service because, he said, it will be impossible for Royal Mail, faced with this unfair competition, to sustain it. The universal service exists in statute, but does she agree that it is not specified what that means? It could mean collection from a central collection point, not delivery door to door.

--- Later in debate ---

[Mr Peter Hain (Neath) (Lab)]

I commend the hon. Member for Northampton South (Mr Binley) for the excellent points he made, notwithstanding his support for the privatisation Bill. I hope the Minister listened carefully to them, because they illustrate that this is a cross-party matter. There is a genuine fear about what will happen to Royal Mail. In making those points, I must apologise to you, Madam Deputy Speaker, and to the House that I will not be here for the wind-ups. As a former Secretary of State for Northern Ireland, I need to go and answer questions in interviews, following the Northern Ireland statement.

I was privileged to work for the Union of Post Office Workers—as it was called in the 1970s—for 14 years, into its new incarnation, before I was elected to this House. What has always worried me greatly about the competition regime around Royal Mail is that it is not a level playing field. Royal Mail’s competitors are not treated in the same way as Royal Mail. I believe that poses a great danger to the universal service obligation. It does not pose a danger to its existence, which has been provided for in statute under this Government, as has been pointed out—I am not arguing that—although the universal service obligation is not defined.

I should say that my criticisms of the competition regime, which has basically stayed the same with the transfer to Ofcom from its predecessor, apply to our previous Labour Government as well and are not simply against this Government. There has been a failure to understand the fundamental problem in this whole matter, which is that Royal Mail has to deliver not just to Swansea or Cardiff from London, which is easy and cheap to do—straight down the M4. Rather, Royal Mail has to deliver up to valley communities in my constituency such as Cwmllynfell or Rhiwfawr, which is expensive to do, let alone making deliveries in constituencies represented by hon. Members from Scotland or other parts of Wales, for example, or indeed rural parts of England. That is where the cost comes in. The expensive part of the delivery network is getting things not between city centres, which TNT and other competitors love to do—

[Lady Hermon (North Down) (Ind)]

Will the right hon. Gentleman give way?

[Mr Hain]

I will in a moment—by the way, this applies to Northern Ireland as well, if the hon. Lady was going to correct me.

The easy part, which competitor companies such as TNT obviously seize on, is getting pre-sorted business mail, which is provided to them by the businesses themselves, along with large-scale deliveries from banks, credit card companies and so on. They bring it in pre-sorted cassettes and containers, and then TNT or whoever rushes it down the M4 or whatever distribution network they use. That is cheap to do—indeed, often they dump it back into Royal Mail, so that it has to do the expensive part of delivering to remote areas. That is the problem. I believe it is a matter of urgency—a point made earlier in the debate—that the Government and Ofcom grasp the problem and sort it out. It cannot wait until late next year; that will be too late for the Royal Mail.

If the delay continues, what I predict will happen to the universal service is this. Yes, it will be there in name, but it will not necessarily apply for six days, because that is not in statute. It will not necessarily apply door to door either, because that is not required on a six-day basis. The universal service is required to apply to every address, but “address” is not defined, as far as I know, over six days, and so on. It is therefore no good sheltering behind the commitment in the 2011 Act to honour the universal service obligation. It is not defined, and when we look at the experience elsewhere—in New Zealand, for example, where a similar process was followed—we find a steady erosion of it.

[Lady Hermon]

I am most grateful to the right hon. Gentleman for giving way and for mentioning the remote areas of Northern Ireland, as well as the remote areas of Wales and Scotland. As he has already mentioned that he is a former Secretary of State for Northern Ireland, will he take this opportunity to put on record the enormous sacrifice and courage of postal workers—Royal Mail workers—throughout the worst of the troubles in Northern Ireland? Many paid with their lives, while others were held hostage or very badly injured in bomb explosions. I would just like him to mention that for the record.

[Mr Hain]

I am grateful to the hon. Lady for making that point. She is absolutely right: postal workers—postmen and women—were extremely vulnerable in the terror and the troubles. In some instances they paid with their lives and in others suffered terrible deprivation.

That brings us back to the value of the posties we all depend on, especially if we do not live in city centres—we depend on them here as well, but they might be posties from organisations other than Royal Mail. However, we will not find TNT staff delivering up Snowdonia, up in the highlands or in some of the remote areas of Northern Ireland, which Royal Mail had to do during the troubles prior to the new regime—a point the hon. Lady rightly draws our attention to.

Let me emphasise that the problem with this competition regime is that it allows Royal Mail’s competitors to cherry-pick and cream-skim the most profitable mail. The access charges paid by those competitors to dump their mail back into the Royal Mail, to make sure it gets delivered to the final address when it is in a remote area, are pitifully low. Unless we urgently increase those access charges and unless Ofcom gets out of its sleeping trance on this matter, which the Government might have to instruct it to do, if that is required—I ask the Minister to respond to this point in my absence, for which I again apologise—I fear for the future of the universal service, the quality of that service and Royal Mail’s ability to provide it, as it is required to do, but which none of its competitors is so required to do.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

I am glad to have the opportunity to speak about the threat to the universal postal service posed by this defective competition regime and companies such as TNT.

I must begin by thanking my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) for bringing this subject for debate on the Floor of the House. I should also say that I am probably the only Member of the House—certainly the only one here today—who has actually been a postman, although it was a holiday job and it was a few years ago now.

[Mr Hain]

Postwoman.

[Ms Abbott]

Indeed.

The point I want to make is about how defective the competition regime is. The competition is unfair and where TNT has taken over provision in London, it offers a very poor service. That goes to the heart of a competition regime that is not about a genuine level playing field. TNT does not have the obligations of the Royal Mail; its staff do not have the same qualities or the commitment of Royal Mail staff.

In London, mail has been dumped under bushes and TNT workers have delivered all the letters to people living in a close through one door, expecting that person to hand them out to their neighbours. As has been mentioned, TNT workers rely on Royal Mail workers to tell them where to go. All that is not only a threat to the universal postal service, but a poor service.

Something needs to be done about the competition regime so that companies such as TNT are obliged to live up to the obligations that rest on Royal Mail. Otherwise, the consequence will be not just a threat to the universal postal service in remote areas of Scotland, Northern Ireland and Wales, but a threat to the quality of the postal service that we all enjoy.

The uniform penny post was established in the British isles in 1840. That was a tremendous innovation and the basis of the historic universal postal service. We all know that letter and parcel deliveries are part of a golden thread that ties the British isles together. Even though so many people use e-mail and texts nowadays, we can all think of an important time in our lives when we opened a letter.

The importance of the postal service in all our lives, and the commitment and professionalism of postmen and postwomen, should not be understated. I had the privilege of visiting my local sorting office in Stamford Hill, Hackney, just before Christmas; many Members visit theirs at that time. I saw how hard postmen work and how much we rely on a stable work force with a commitment to their work and an ongoing knowledge of their areas to provide the service that all our constituents deserve.