Can I firstly pay tribute to the Hon Lady for North Ayrshire and Arran. She has laid out a compelling case for keeping the Royal Mail in the public sector and I hope the Minister will consider carefully what she has laid out.
Can I apsl pay tribute to the staff of RM. They have worked tirelesley alongside management to make the Royal Mail a leaner and fitter modern company and the recent results of an annual profit of £324m is testament to that hard work at steely determination to keep the post public.
Mr speaker, the Royal Mail is a cherished institution:
- It has a universal service obligation that covers all parts of the UK.
- It does so for 1 uniform price
- It dates back to 1516 and is an integral part of British life
- It touches all of us whether it be the birthday or Christmas card, the letter from a friend or the statement from your bank. It even delivers those pesky bills.
- It is the last publically owned institution and we think it should tay that way.
But it does have challenges:
- Letter volumes are falling fast as we all turn to electronic communications
- It still has some way to go to complete the modernisation programme
- Its profits are growing at the moment but that growth may be fragile.
- There is the potential for industrial action following the survey of CWU members last week.
- The maintance of the USO is expensive,
- The position of Royal Mail is under threat by other companies cherry picking lucrative geographical areas whilst RM have to maintain the USO.
- Other operators have much lower service requirements than the RM
But the landscape has changed since the Hooper Report 2008 and I wish to lay out the changes:
- The £28bn of pension fund assets have been transferred to the Treasury and the long term liabilities that go with this (interesting how the Chancellor used this money to make his budget look better last year) – we have put these liabilities on the public purse but the Governent want to privatise the profits.
- The regulatory environment has improved following the transfer of responsibility to OFCOMM
- Industrial relations have improved with the appointment of Moya Green as the CEO and let me take this opportunity to praise the work she has done int his area alongside the trade unions
- Modernisation has continued apace with real improvements in the profitability of the company
- The explosion of the parcel business has made up for the loss of letter traffic.
This is a much changed environment from the Hooper days.
So why privatise now when the changes since Hopper are bedding in and the company is going in the right direction?
Well, let me tell you why. The chancellor has an utterly failing economic plan that requires a significant injection of cash and he will get some of this through the fire sale of Royal Mail. Work programmes have been brought forward and £30m is to be spent getting this sale concluded as quickly as possible.
Let be quite clear, this has nothing to do with postal services or the impact on the public but is to save the blushes of this chancellor.
And, this policy of sale in the Postal Services Act is opposed by a wide range of orgnanisations, businesses:
Who is against it
- Well, the late PM Thatcher, the architect of privatisation said it would be a step too far and would always fear to tread..
- More recently, the right wing think tank, the Bow Group said “It is likely to be hugely unpopular, prices will rise at a time when people cannot afford it, an amenity that many communities consider crucial will be removed, it will undermine the heritage of Royal Mail. The privatisation of Royal Mail is likely to move swifty from a poisonous legacy for the Government now, to a poisonous legacy for the Conservative Party going forward” _ i would include the Liberals in this also.
- The Lib Dems, although they have voted every step of the way to privatise it. Even the DPM?
- The CWU – consultative ballot last week showed 96% against privatisation.
- And before the Minsiter jumps to his feet, UNITEm, who represent many in management and senior management said they were becoming increasingly concerned about the implications for the public, pensioners, small businesses.”
- The cross party BiS Select committee, including prominent government backbenchers.
- National Federation of Sub postmasters initially back the Postal Services Bill but now say that the privatisation of Royal Mail could do irreversible harm to the Post Office Network as promised Government contracts have not come through. They are right to express concern as to the 10 year inter business agreement and the £360m that supports the PO from RM business. What happens during or after this period?
- And of course, who else is against it – well, the Minister himself PICK UP LETTER – he says he has changed his mind as 10% of the shares will go to staff. Well 96% of the staff say you are wrong despite this hollow promise. And the hand brake turn has been so pronounced that the Minister decided that he would try and win them over by threatening the Royal Mail staff that if did not support this he would sell it off to foreign investors without any shares.
Price – the money will not go to RM but to the Treasury
Not a level playing field – service standards
USO – end to end. Yes, the regulator has the power to protect the USO but at what point. Private operators come in and cherry pick the profitable parts of the Royal Mail leaving it with less ability to make profit in some areas whilst having to maintain the USO. That surely makes the USo more expensive and, therefore makes it less likely to be maintained.
What about a Royal Mail that starts to fail becuae of this. We have witnessed it recently with the East Coast mainline. GNER failed, National Express handed back the keys and who picked up the bill – the tax payer. There is no safert net if all this goes wrong and the USO collapses. The taxpayer will pick up the bill alongside the pension deficit.
Finish with some questions to the Minsiter:
- Does he have a plan B if an IPO is not possible?
- Will he sell it into foreign ownership as he threatened the staff with?
- Will a privatised Royal Mail still be covered by the FOI Act?
- Will the RM still get its excepmtion on VAT?
That’s why, Mr Speaker, the case for the status quo, with the Royal Mail as a public service, is as strong as ever.