Postal Services Bill

Part of Planning (Developer Bonds) – in the House of Commons at 6:39 pm on 27th October 2010.

Alert me about debates like this

Photo of Edward Davey Edward Davey The Parliamentary Under-Secretary of State for Business, Innovation and Skills 6:39 pm, 27th October 2010

My hon. Friend has corrected the record, and I can say that we have that good management with Moya Greene.

The real challenges of the digital world, as Mr McFadden said, apply to all postal administrations across the world. It is the deep challenges that face Royal Mail and the Post Office that make the position of the Opposition at best incredible and at worst downright irresponsible. They know the problems that Royal Mail faces: the decline in letter volumes as e-mail volumes grow exponentially, the large losses the company has made in recent times, and the incomparably large pension deficit. We know that they know, because just last year they said the same thing, and put a Bill before Parliament to address those very same problems. I have that Bill here-but unfortunately it was not brought down the corridor from the other place for us all to debate in this Chamber. If it had been, the similarities in the Bill would have meant that many of the questions raised in this debate could have been debated then. So, let me address some of the questions that I have been asked.

The hon. Member for Vauxhall talked about foreign ownership. She may remember that when her Government tabled their Bill there was concern on the Labour Benches that TNT and Deutsche Post might buy Royal Mail, so she has an issue to raise. What is often forgotten in this debate is that British investors already own 30% of Deutsche Post. That is the real world: investors invest in good companies.

Mr Anderson had worries that the royal associations would somehow be broken as a result of privatisation. The Queen will continue to approve all stamps that bear her image, as she does now. The Royal Mail brand is valuable and we will put safeguards in place against its misuse. We have initiated discussions with the Palace for that very purpose. I should tell the hon. Gentleman, who claimed that more post offices closed under the Conservative Government, that he is wrong. In 18 years of Conservative government fewer post offices closed than in 13 years of Labour government.

Coalition colleagues might be concerned because of the similarities between our Bill and the Labour Bill. They are so similar that we half expected the Labour party to feel duty-bound to support our Bill.

For example, there are almost identical proposals on pensions, except that our proposals are slightly more favourable to Royal Mail employees. The clauses on regulation are also similar, except that our Bill introduces new safeguards for the universal postal service that were strangely absent from the previous Government's Bill. Our Bill rebalances the regulatory framework, putting the universal service and its financial sustainability at its heart.

Those ought to be major areas of agreement, but we did not get that tonight. We heard some bizarre criticisms from Opposition Front Benchers. They said that we are not addressing the problems of the regulatory system, but it is their regulatory system. They do not appear to have read the Bill, because we are making changes to that regulatory system.

The right hon. Member for Wolverhampton South East brought in Ofcom in the previous Government's Bill. It has a duty to reduce unnecessary regulation, which will assist the legislation. The Bill requires cost transparency and accounting separation to deal with many of the regulatory problems that my hon. Friends the Members for Southport and for Pendle (Andrew Stephenson) raised in the debate.

Surprisingly, Opposition Members also raised concerns about the pensions solution. The hon. Member for Vauxhall said that it is possible to achieve a solution on pensions without a sale. It would be irresponsible to ask the taxpayer to take on an £8 billion deficit without securing private capital and disciplines and without transferring future risk from the taxpayer. This is a package deal, which is what Hooper argued for and what we are delivering.

Richard Hooper made it clear that action is needed if we are to secure the future of a universal postal service. His document, "Modernise or Decline", sets out those options. When Mr Weir questioned whether a privatised Royal Mail would threaten the universal service obligation, he was ignoring the evidence put forward by Sir Richard Hooper. I can only think that he has not read the Bill. If he had read it, he would know that it is all about safeguarding the universal postal service of Royal Mail and the Post Office, recognising the particular importance of those services to our rural communities.

The six-day, one-price-goes-anywhere universal service obligation is enshrined on the face of the Bill, but we have not stopped there. The Bill introduces new safeguards to protect that service, ensuring that any future change must be properly debated by Parliament, must retain the uniformity of the service and must take into account the interests of postal service users, which, of course, includes rural communities. The scaremongering of the Scottish nationalists flies in the face of both the facts and the text of the Bill.

Returning to the substance of today's debate, despite our producing a Bill that is better than the previous Government's Bill-better for Royal Mail employees' pensions and better for the protection of the universal service-the Opposition are determined to oppose it. Where are the huge differences that are causing the Opposition such problems? We want to provide Royal Mail employees with shares, so workers can benefit from the prosperous future for Royal Mail that our reforms will enable. The previous Government talked about involving employees, but they argued with the unions about giving employees shares and then argued with themselves. This Government are united, and we are going to do it through the largest employee share scheme by percentage of shares of any major British privatisation. For the first time ever, I believe, we are mandating an employee share scheme on the face of a Bill. As a member of a party that championed employee share ownership for decades in opposition, I could not be more proud to present this radical measure to the House tonight. I pay special tribute to my hon. Friend Norman Lamb, who did so much to develop those issues when we were in opposition.

I also thank my hon. Friend Chris White, who explained how important employee share ownership can be in driving productivity. He was concerned that only 10% of shares will go to the employee share scheme, but I can tell him that the Bill refers to "at least 10%". I was pleased by the support for employee shares from my hon. Friend Jesse Norman. His chairmanship of the all-party group on employee ownership shows that he knows about that area. He raised a constituency case, which I will take up if he writes to me.

Another key difference between Labour's Bill and our Bill is our mutualisation proposal for the Post Office. Sub-postmasters, Post Office employees and communities can all have a say in how their post offices are run. The co-operative model is a huge example of the big society and something that the old Fabians would have classed as public ownership, but the Labour party is going to vote against the Bill.

Let me clarify the mutualisation proposals for the Opposition, who do not seem to understand what they are all about. Post Office Ltd, the national company that franchises to individual post offices and chains of post offices, would become a mutual if our proposals go ahead. We believe that having a national mutual similar to the Co-op would have many practical benefits and would align the incentives of sub-postmasters with those of the company and their main franchisor. When it comes to modernisation and putting services online, it is important to have aligned incentives.