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Royal Mail

Volume 503: debated on Thursday 14 January 2010

During the dispute before Christmas, we kept in touch with both sides, encouraging an agreement on the modernisation of Royal Mail. Those talks are continuing, and I believe that in the context of falling mail volumes and the greater use of new technology, both Royal Mail and representatives of the work force understand that there are likely to be fewer people working for Royal Mail in the future.

I thank my right hon. Friend for his answer, although I am disappointed that he is perhaps not taking a more active part in the discussions. What does he plan to do about the apparently ever-growing pensions deficit? Do the Government not have something to do on that? Should they not be helping Royal Mail and the Communication Workers Union and its members to ensure that they get a better settlement?

We have certainly helped Royal Mail and its work force by putting considerable finance, on behalf of the taxpayer, into it over the past decade. Just three years ago, we lent the company £1.2 billion to finance its much-needed modernisation. The mediator in the talks taking place now is Roger Poole, with whom I regularly keep in touch. The important thing is that both the work force and management reach an agreement to carry forward the modernisation.

My hon. Friend also mentioned the pension deficit. That is an issue for Royal Mail. We put forward a proposal to deal with it, as part of the Postal Services Bill, but I am afraid that many people were opposed to that package, although we made it clear that it was a package, and not something from which items could be picked out one by one.

Job security for Royal Mail’s employees, and indeed the security of its competitors’ employees, is threatened by the continuing regulatory uncertainty in the sector. Will the Government use the Digital Economy Bill to introduce the regulatory change aspects in the Postal Services Bill, because those particular issues are not related to the wider issues of the future ownership of Royal Mail?

We do not plan to separate out the regulation part of the postal services package that we proposed, as is the case with the pension proposals, which I just mentioned. The priority for Royal Mail now is that the talks succeed in reaching an agreement on the much-needed modernisation, because mail volumes are falling around the world and new technology is not going to go away. That is definitely in the interests of Royal Mail, its work force and the general public.

May I take this opportunity to pay tribute to postmen and women, certainly in my part of the world, who were pretty valiant in the cold weather, getting the mail through?

The regulatory aspect of the postal service is critical, as the Hooper report made clear. At the moment, Postcomm is in limbo from having half departed but not arrived at its new destination. What are the Government doing to ensure that in the limbo created by abandoning the Bill the regulatory framework will be improved in the way needed?

I agree with the hon. Gentleman about the valiant work that postmen and women do. They underpin the universal service at the heart of our postal system, and we are determined to preserve that for the future. However, I am afraid that I cannot agree with him that the regulatory system is in limbo. It is true that we had plans to change the regulatory system, but Postcomm is in place, it is the established regulator, it has a job to do, and it should continue to do it.

As the hon. Member for Glasgow, North-West (John Robertson) and my hon. Friend the Member for Mid-Worcestershire (Peter Luff) have said, Royal Mail requires structural reform if it and its employees are to move forward. However, the unions and Labour Back Benchers have forced a weak Government to pull the Postal Services Bill, so what, other than a Conservative Government, will deliver any action for reform?

We did not proceed with the Postal Services Bill because the market conditions did not allow us to get the best value for money for the taxpayer. The hon. Gentleman spoke about his plans, but the right hon. and learned Member for Rushcliffe (Mr. Clarke) has been clear about those: the Conservatives would privatise the Royal Mail. That is not our proposal and it was not our proposal in the past.