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Royal Mail

Volume 506: debated on Thursday 4 March 2010

4. What plans he has for the future of Royal Mail’s universal service obligation; and if he will make a statement. (320195)

The Government are committed to maintaining the one-price-goes-anywhere universal postal service. In the UK, the universal service provides a six-day-a-week letter service and a five-day-a-week parcel service. This goes beyond the minimum requirement in the relevant EU Directive and we have no plans to change the universal service obligation.

I am grateful to the Minister for that answer. Is he aware that Postcomm has issued no fewer than 46 licences entitling companies to deliver to the door? Does he accept that that raises a real danger of cherry-picking in urban areas? That would leave Royal Mail having to deliver the universal service to the rural areas, and raise long-term concerns about the sustainability of that service. Are the Government looking at the future in that context?

As I said, we are determined to keep the universal service. It is an important part of the social glue of the nation, and it is particularly valued in constituencies such as the hon. Gentleman’s, which is one of the most beautiful and remote parts of the UK. He referred to competition, but most of the competition developed in mail so far has been in upstream access and not door-to-door delivery. The vast majority of letters—I think around 98 or 99 per cent.—are still delivered every day by the Royal Mail. We express our gratitude to the hard-working postmen and postwomen who do it.

Of course my right hon. Friend is right to show his commitment to the USO, and we are pleased to hear it. Does he accept, however, that the USO ought to be backed up with a very strong post office network with a community bank? The two go hand in hand: will he please show the same commitment on that?

I agree that banking and financial services are already a very important source of revenue for the Post Office, which has some 2 million financial services customers. We recently issued a consultation document asking the public about the extra services that they would like, and also about things such as current accounts, weekly budgeting accounts, children’s savings accounts, and so on. Like my hon. Friend, I think that such services offer huge potential for Post Office revenues. Traditionally, people went along to the post office every week to claim their pensions or benefits, but those claimant patterns have been in decline in recent years. That decline is probably likely to continue.

The Government have ignored the sensible recommendations of the Hooper report and abandoned their own Postal Services Bill, so does the Secretary of State have any policy that is designed to save the universal service—or, for that matter, the future of the Royal Mail?

I am very grateful to the hon. Gentleman for my premature and—at the moment—fictional promotion, but I will stick to the job that I have. The most important thing for the future of Royal Mail is a comprehensive modernisation package that covers the introduction of new technology into the network as well as the number of mail centres, delivery offices and so on. The package should also cover the working practices that will need to alter to accommodate those changes.

For the past couple of months, these very matters have been the subject of intense negotiations chaired by Mr. Roger Poole, the former deputy general secretary of Unison. I am hopeful that a comprehensive modernisation agreement will be reached. If it is, that will be in the interests of Royal Mail, its staff, and the public.

Three major banks still do not let customers use banking facilities at post offices, even though two of them are partly owned by the Government. What progress is being made towards allowing customers of those banks to use post offices? That would provide extra business for post offices, and extra facilities for their customers.

I am grateful to my hon. Friend for raising a very good point. We have been talking to the banks about this, particularly in the light of consultation on post office banking. Members of the public may not be aware that some 20 million high street bank accounts are currently accessible through the post office, but I agree that we want that number to rise. We want more banks to allow people to access their accounts through the post office network.