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Post Office Network

Volume 464: debated on Thursday 11 October 2007

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

The Government are committed to securing a long-term viable future for Royal Mail and the post office network. To this end we have made substantial investment available both to support the modernisation of Royal Mail and to provide a comprehensive and accessible national network of post offices.

How come it took until yesterday for the Prime Minister and the Secretary of State to condemn the Royal Mail strike? Could it have anything to do with the fact that, until the Prime Minister bottled at the weekend, he was expecting lots of funds from the Communication Workers Union to fight the election?

That is untrue. I have made it clear repeatedly since I have been in this job that the strikes should end. There has to be a sensible solution to this industrial dispute. My interest is to safeguard the investment that the taxpayer has made in this business and to ensure that the business can operate effectively in the liberalised market in which it operates. It is completely untrue to say that Ministers have been silent. We have made our views known on this matter repeatedly since the summer.

The Secretary of State rubbishes the point made by my right hon. Friend, but over the past four years the CWU has made political contributions of £4.5 million, half of which has gone directly to the Labour party, with the rest being used for campaigning in the Government’s favour. This presents the Secretary of State with a huge conflict of interest, given that the Government are the sole shareholder in Royal Mail and a recipient of funds from the principal union involved.

There is absolutely no conflict of interest of any kind whatsoever. I have made it clear repeatedly, as has my right hon. Friend the Prime Minister, that we will always speak up for the public and the taxpayer when it comes to the future of Royal Mail and the Post Office.

Yes, I am a member, and I am proud to be one.

May I ask the Secretary of State why the Government are refusing to intervene in this dispute, which is costing Royal Mail millions of pounds and inflicting countless damage on hundreds, if not thousands, of other businesses across the country?

Let me explain to my hon. Friend that our role in this regard is to speak up for the public and for the taxpayer. We are not going to take sides in this dispute. That is our perspective, and I think that it is entirely proper that the management and the unions negotiate the terms and conditions for people in Royal Mail. I am not, for example, going to intervene to provide further funding to support a different offer to Royal Mail staff. We have given Royal Mail substantial investment, and it must operate within those investments and ensure that the taxpayer gets a return on them. I believe that the offer that has been made to Royal Mail staff is a decent and fair one, and I hope that this industrial dispute ends as quickly as possible.

Given that the Government intervened strongly and energetically to sort out the affairs of a private company, Northern Rock, is there not a case for following that example and adopting a more even-handed approach and acting as an honest broker in this dispute? Should not the Government intervene before breakfast, intervene before lunch and intervene before dinner—in the words of a former Secretary of State for Trade and Industry—to get a fair, just, negotiated settlement, not least in the interests of all the businesses that are suffering at the moment?

I agree that there must be a fair, just and negotiated settlement, which is what we believe should happen. I remind him and other hon. Members that in 2001 Parliament—with general consensus and with the agreement of both Royal Mail management and the trade unions—agreed that Royal Mail should operate with commercial freedom. I am not going to get involved in individual discussions on terms and conditions because I do not believe that it is appropriate for Ministers to do so. What I believe is appropriate is that this industrial action should end, as I agree that it is damaging businesses and inconveniencing the public.

Is the Secretary of State aware of the real anger felt by people in my constituency, particularly in Walton, Kirby and Clacton, about the news that their post offices and sub-post offices might be closed? Is he aware that under these proposals post offices that are paying their way, on which many older people depend, could be shut?

As the Minister for Employment Relations and Postal Affairs has made clear, there is an obvious case for pressing ahead with these changes. The post office network must find a long-term and sustainable basis for going forward and it has to reflect changing customer preferences, which are visible to all of us in our constituencies. It is inconceivable that any sensible Government could follow the advice of the hon. Member for Rutland and Melton (Alan Duncan) and find up to another £1 billion to subsidise the post office network, which I understand is now his policy. That is simply not economically credible. It is a deep disappointment to me to see the Conservative party, which always used to clothe itself in respectability when it came to financial matters, now displaying utterly hopeless economics.

Will my right hon. Friend confirm whether the current management of Royal Mail has his full confidence in searching for a solution to the present dispute on how it delivers a secure and solid future for Royal Mail, its customers and its employees?

Does the Secretary of State understand that the questions that he has heard from his hon. Friends today only reinforce the growing view in the country that the Government need to use their authority—as the Government and sole shareholder in the Royal Mail Group—to intervene decisively in the dispute and bring it to an end? The dispute is causing huge damage not just to the Royal Mail Group, but to the whole social and economic fabric of the country. I therefore welcome the Secretary of State’s preparedness to come before the Trade and Industry Committee next week—I hope that a date can be organised shortly—to answer questions on the dispute.

I always look forward to appearing before the hon. Gentleman’s Select Committee and I am sure that this occasion will be no exception. We should bear one important fact in mind: fortunately, we live in a country where no Minister has the power to compel people to work or not to work. I therefore have limited powers in this case, which is obvious to everyone. Our job, I think, is to make it clear to the management and the unions where we believe the public interest lies in this matter. We have done that very clearly indeed.

I hear what my right hon. Friend says, but it cannot be helpful when the chief executive of Royal Mail makes the comments that he has about his own work force. Postal workers are greatly depressed about the dispute and its possible outcome. It is outrageous that people who have given their lives to the organisation are now having imposed on them changes in terms and conditions of their work that would be completely unacceptable in other sectors. Is it not about time that the Secretary of State understood what postal workers are suffering and intervened?

I have had the very good fortune to discuss these issues with some of my own constituents who work for Royal Mail. I understand their concern about the future, which we all share. However, as I said in an earlier reply, it is important that we have a sensible, negotiated solution to the dispute, which I believe is perfectly possible. I have the greatest respect for staff who work in Royal Mail—we all do; we know what an important and highly valued job they do in our constituencies—but we must not lose sight of the important fact that if Royal Mail is going to succeed in the liberalised marketplace in which it now works, change is inevitable. We must facilitate a process of change, as the status quo is not sustainable. There will have to be changes inside Royal Mail if it is going to have the successful future that we all want it to have. I strongly believe that the best way to progress that is through a sensible agreement.

The Secretary of State will appreciate that an area such as mine has been particularly hammered by the dispute, because of the absolute reliance on Royal Mail not just by individuals but businesses. In welcoming what the Prime Minister said yesterday, may I draw to the Secretary of State’s attention the fact that the GP who administers the Small Isles medical practice has told me that people on those islands who have had blood tests cannot now get the results because the method of communication between the regional hospital and those islands is no longer in place? That is a desperately serious state of affairs. Even if the Government cannot intervene in the negotiations over the dispute, could they at least, in concert with the Scottish Executive, consider emergency provisions for people who are medically dependent on that service?

I am very grateful to the right hon. Gentleman for bringing that point to the attention of the House, and I will pursue it. We should not forget that in some cases, one of which he has highlighted, the industrial action could compromise a person’s life. That is simply unacceptable.

The letters that MPs get from Royal Mail and the union all say that they want a modernised and more competitive business. If the management and the work force agree about where they want to be, cannot the Government, as the owner of the business, help them to agree how to get there?

That is very much what I want to do, and I want to try to make sure that that happens. I hope that there is still sufficient good will for the process to reach a sensible conclusion. Management and the trade unions are talking as we speak, and I hope that a way is found quickly—it must be quickly—to end this damaging dispute, which is compromising the investment that taxpayers have made in the Royal Mail, compromising businesses, inconveniencing the public and, in the worst case scenario, as the right hon. Member for Ross, Skye and Lochaber (Mr. Kennedy) said, threatening the health and well-being of individual citizens, which is unacceptable.

Is it not the case that 43 Labour Members have signed an early-day motion expressing implicit dismay at the Secretary of State’s apparent indifference to the growing severity of the dispute? At last, today, we have heard rather more from him, which is welcome. The Government are the sole owner, the company must modernise or decay, and businesses up and down the country are being hurt. Given his answer to his hon. Friend the Member for Stafford (Mr. Kidney) that that is the way he wants to go, what further steps will he take to make it clear that union leaders are not acting in the interests of postal workers and that an immediate settlement is in everyone’s interests?

We will continue to make that point. We have made the point clearly again to Royal Mail management, and this morning I had the opportunity to do so again to the general secretary of the Communication Workers Union. We do understand the severity and seriousness of the situation, we are behaving responsibly as the shareholder in Royal Mail, and we will do all that we can to bring the matter to a sensible conclusion. That must be done on the basis of terms that are acceptable to us as taxpayers and investors in Royal Mail. The Prime Minister set out clearly yesterday the terms on which the dispute should be settled.

Is not the cruel truth that in their weekly pay packet tomorrow 130,000 postal workers will receive only one day’s pay? Will not their understandable fury at the sacrifice that they are making illustrate harshly that they are being seriously misled by backward-looking union leaders and that their future is best protected by supporting positive negotiations and a constructive plan for modernisation?

The dispute must have a sensible outcome, as I have made clear repeatedly. I will not get involved in the blame game as the hon. Gentleman has tried to do. It is essential that the dispute be now brought to an end, and the best and only sustainable way in which that can happen is a return to work on the basis of the offer that Royal Mail has made. If there are still points of detail that need to be discussed and debated—I understand that there are—those should be debated in a sensible fashion and not in a way that inconveniences the public as the industrial action is doing.

During my recent visit to Watford sorting office, organised by my colleague Sal Brinton, comments by management and staff indicated that structural restrictions prevent Royal Mail from competing on a level playing field within its own sector. Is the Secretary of State willing to meet me to discuss the underlying structural issues concerning employees and management of the Royal Mail, which may be contributing to the current industrial difficulties?

I should be happy to meet the hon. Gentleman, and any other Member who wants to raise those issues with me.

The European Union has now agreed on a long-term framework for the future liberalisation of postal services, which is very welcome. There can be no turning back of the clock in relation to liberalisation in the United Kingdom—that would be a hugely retrograde step—but we are always willing and ready to discuss with the Royal Mail unions, the hon. Gentleman and other Members any points of detail or concern that they may wish to raise, and I look forward to that.