The Royal Mail has put in place a three-year restructuring programme to improve service delivery and put the company on a sound financial footing. The renewal plan is working. In the first half of 2003–04, 93 per cent. of first-class letters were delivered the next day—the highest figure in 15 years and well above the European average. That figure fell with last autumn's strike action in London, and changes to working practices mean that current performance is around 90 per cent. That falls short of what customers are entitled to expect, and the Royal Mail and the unions must now work together to improve the quality of the service.
Last year, the Royal Mail failed to meet 12 out of 15 of its national performance targets. This year, it will fail them all, and the new chief executive has publicly apologised for its appalling level of service. Will the Secretary of State bring urgent pressure on the Royal Mail to review its plans for reform? In particular, the scrapping of the second post means a later delivery, which is inconvenient for both businesses and households.
Let me echo the chief executive by adding my apology to any customer who has been inconvenienced by late delivery or loss of mail.
On the second delivery, let me point out to the hon. Lady that no other postal operator makes two deliveries a day. The second delivery, which accounted for a mere 4 per cent. of mail, was eating up 20 per cent. of the Royal Mail's costs. That was simply unacceptable in a company that was losing more than £1 million a day, which is why it is moving towards one delivery a day. I accept that the new system is causing problems as it settles down. When I spoke to Allan Leighton last week, I stressed, and he fully accepted, the need to get the change to a single delivery working as quickly as possible.
I hope that the hon. Lady will not make the mistake that some have made in recent weeks of talking down the Royal Mail—as the Conservatives always talk down public services—and sneering at hard-working, honest postmen and women all over our country. I hope that she will take the opportunity to congratulate her local sorting office—
Order. The Secretary of State is getting involved in an argument. I do not think that the hon. Lady attacked the Royal Mail.
Although I certainly want to support the Royal Mail in Burnley, does my right hon. Friend recognise that the new system is causing chaos? There are bags of untouched mail, and some places are getting only one delivery a week. That is seriously affecting business, and lots of people are protesting. Will my right hon. Friend tell Mr. Crozier that the Post Office should discuss with the postal workers who have to do the work, and with the unions, what the changes involve? Otherwise, we will have a system in absolute chaos. Perhaps Mr. Crozier should come to Burnley to look at the problem.
Let me assure my hon. Friend that all the changes that are being made are being decided at the local level by area managers in full consultation with the employees, because that is the only way in which a change of this magnitude can be carried out. I am extremely sorry that my hon. Friend's constituents have been suffering the inconvenience that he describes, and I will certainly draw that to the attention of Allan Leighton and Adam Crozier. I know that my hon. Friend will support the efforts that they are making to deal with the bad industrial relations that have dogged certain of our sorting offices and caused such problems.
Will the Secretary of State acknowledge that thousands of hard-working and industrious postal workers will feel let down by some of their colleagues who have pursued damaging unofficial strikes, as well as negligent and, in some cases, criminal activities that besmirch the vast majority who want the service to improve? Does she acknowledge that without investment and change, the Royal Mail will not meet the target improvements that she is talking about, but will face cherry-picking from competitors and a loss of confidence in a universal service? What will she do to ensure that the Post Office has the power and the investment to deliver the changes that will get us back to the first-class service that we deserve?
We have put new management and leadership into the Royal Mail and we are investing £2 billion to support its modernisation and renewal process, in both letters and post offices. That renewal plan, which is absolutely necessary, is starting to work, thanks in no small part to the huge efforts of hard-working postmen and women who were as angry and dismayed as anybody else by the revelations—which were mainly about temporary workers from just two sorting offices—on Channel 4 last week. We will make the investment and support the reform. The Conservatives would of course make that investment impossible with their public spending cuts.
May I tell my right hon. Friend that my postal services in Cambridge are incomparably better than they were four years ago, and that the cancellation of the second delivery has actually led to an earlier first delivery? Certainly, I have heard no recent complaints, despite the fact that it is extremely difficult to recruit and retain postal workers, who do a very good job.
I am very grateful to my hon. Friend and I know that the postmen and women in her city of Cambridge will be, too. Despite the teething problems that have inevitably accompanied the change from two deliveries to one delivery—an enormous change programme—90 per cent. of first-class letters are delivered the next day in the country as a whole. In most of the 1,100 sorting offices where the single delivery has been introduced, the system is working well.
Of course we accept the Secretary of State's point that most Post Office workers do an excellent job. Conservative Members are also grateful for her public apology for the Post Office's recent performance. She mentioned the "Dispatches" programme and the items that were destroyed in the River Thames, and she knows that Monday's Postcomm report referred to 8.5 billion items being wrongly delivered and a further 6 million being lost in the past year. She cannot duck the fact that the Post Office is 100 per cent. owned by the Government. What is her personal vision for the future governance of the Post Office? Surely she accepts that it cannot carry on as it is.
That was a speech rather than a question. Let me stress that we have put in place a new form of governance for the Royal Mail: a publicly owned corporation with the commercial freedom to operate at arm's length from the Government. We called for that when we were in opposition, as did the unions, but the Government whom the hon. Gentleman supported refused to make the change. We have put in place new management and we are supporting the renewal programme, which is starting to deliver. Indeed, the Post Office is now making profits. We are delivering a vision of a modern, competitive Royal Mail, which meets customer needs, supports communities throughout the country, makes a profit, not losses, and has a strong regulator, which we created, not the Conservatives, to ensure that customers get the good deal that they are entitled to expect.
I do not wish to be accused of talking the Post Office down, but my personal experience and that of my office in Leicester of postal delivery is totally different from that of my hon. Friend Mrs. Campbell. The situation is incomparably worse in Leicester now than it was four years ago. I hear all the rhetoric about what we have done, and what the Post Office intends to do and has done, but will my right hon. Friend give me and my constituents an absolute guarantee that, in the foreseeable future, delivery times will be increasingly reliable and that the mail will be delivered when the Post Office says that it will be delivered?
I understand my hon. Friend's concerns, although I know that he will welcome the fact that the Leicester delivery office is one of the best performing city centre offices in the country on tackling misdelivery and redirection. As I said earlier, the change to a single delivery is causing problems in the first two months of its introduction. The new system needs to bed down. It is an enormous change programme and I readily assure my hon. Friend that, as it beds down, the company will revert to the high standards of customer service that his constituents and mine are entitled to expect. I emphasise that the renewal plan is essential to the future of the Royal Mail and I know that he and other hon. Friends will support it as it improves the service to customers.
Does the Secretary of State realise that the hard-working and decent postmen and women as well as local businesses in my constituency complain to me about the service? Will she examine the new distribution arrangements? One of the problems is that the mail does not arrive at local sorting offices until much later in the morning because it has not been distributed properly from the main centres. The postmen and women cannot leave until all the mail is sorted.
That is indeed a problem that seems to be occurring in some places, although it certainly is not happening everywhere. I will readily undertake to draw to the attention of Adam Crozier the specific problem of the postmen and women in Hexham.