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Royal Mail Privatisation

Volume 633: debated on Tuesday 12 December 2017

1. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry. (902879)

11. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry. (902892)

12. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry. (902893)

13. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry. (902894)

Almost all Royal Mail’s 142,000 staff are on permanent contracts and earn above the living wage. Employees own 12% of its shares, and it has been a Times top-50 employer for women for four consecutive years. The Government will protect workers’ rights, ensuring they keep pace with the changing labour market.

Today is postal workers day, and I am sure the House would like to thank all postal workers in Royal Mail and Parcelforce for the good work they do all year round, six days a week, in all kinds of weather across the UK.

Royal Mail was not for sale. Under this Government and privatisation, its employees face worse pay and conditions and attacks on pensions, along with the threat of more job losses. Will the Minister renationalise Royal Mail?

I heartily agree with the hon. Gentleman’s celebration of our postal workers today. As he says, they will deliver in all weather to 29 million addresses across the country over the festive season. I cannot agree, however, that renationalisation is the answer. Royal Mail is in negotiations with the Communication Workers Union, and progress has been made following mediation by Professor Lynette Harris. I assure the hon. Gentleman that there would be a great loss to the postal workers, who, let us not forget, own 12%—

Order. I am extremely grateful to the Minister, but we have a lot to get through. We need to be much brisker. Sorry.

I refer to my entry in the Register of Members’ Financial Interests. As postal workers trudge through the snow this morning, they will have a right to be aggrieved at losing their pensions, while Moya Greene gets paid £1.9 million and gets free flights, paid for by Royal Mail, to Canada. Does the Minister accept that?

I disagree with the hon. Gentleman. The pension scheme, if left unchanged, would result in virtual bankruptcy for Royal Mail. It would require an injection of £1.3 billion annually, against profitability of approximately £700 million. I think he can do the maths himself.

Royal Mail is paying out over £200 million in dividends every year to private shareholders. Last year, the chief executive saw her pay increase by 23%. How can the Government stand by a model of ownership that sees postal workers’ pay being frozen and their pensions left unaffordable?

I understand that Royal Mail’s offer of a pay increase to its workforce is far from frozen. I do not propose to comment much further, however, other than to say that the figures the hon. Gentleman refers to are misleading, because they go way beyond the chief executive’s base salary and include performance-related benefits, which are in line with a position of that stature.

Order. The Minister may judge that the figures are misleading, but I am sure she would not suggest that the hon. Gentleman would deliberately mislead the House.

In the privatised Royal Mail, 500 jobs have been lost while, at the same time, it has dished out close to £700 million in dividends to private shareholders. Is this a record of privatisation the Minister is proud of?

As I said earlier, Royal Mail contributes £400 million a year to the pension scheme and, since privatisation, has provided access to capital of £1.5 billion and converted losses of £49 million into profits of £700 million. I would say that that was a pretty successful record.

Does the Minister agree that, regardless of ownership, Royal Mail needs to continue to modernise and become more efficient, because it operates in an increasingly competitive marketplace?

My hon. Friend makes a very good point. When Royal Mail was privatised, Amazon was one of Royal Mail’s biggest customers; Amazon is now one of its biggest competitors. So he is absolutely right. More investment in technology and modernisation is required if Royal Mail is to maintain its market position.

The posties in Kettering work extremely hard all year round and do a tremendous job, especially at Christmas. What is the value of the average postal worker’s individual stake in Royal Mail?

I can confirm to my hon. Friend that the workforce own 12% of Royal Mail, which is a fact that the leadership of the Labour party should consider as it contemplates a round of nationalisation.

All the evidence is that employment standards in Royal Mail and more widely are being driven down, including with job losses and cuts to pensions. Is the Minister seriously arguing that employment standards today are higher than they were at the point of privatisation?

The hon. Gentleman should accept that Royal Mail needs to maintain its position in the marketplace. It already provides employment conditions that are the envy of delivery workers employed by its competitors.

Royal Mail employs a significant number of people in the north of Scotland. Protecting those jobs, and the universal service that the workers deliver, is vital, especially given that, according to Citizens Advice Scotland, more than 1 million Scots face surcharges or late delivery, or are refused delivery altogether, when they buy goods online. Will the Minister commit herself to protecting those Royal Mail jobs, and will she confirm that there will be a review of the regulation of parcel delivery prices to support our rural communities?

The hon. Gentleman has made a good point. Royal Mail is regulated by Ofcom, which benefits everyone involved in the service. The universal postal service includes a parcel service. Companies must have regard to fairness in setting delivery charges, and any failure to be clear to customers before bookings breaches consumer protection law.

Today marks postal workers day, when we thank our posties for their hard work and determination in providing a key public service—not that the Conservatives will take any notice. In a privatised Royal Mail, we have seen 12,000 job losses and proposals to slash pensions by 45%. It is a classic case of “one rule for the rich and another for the rest”. Royal Mail has paid out £70 million in dividends to private shareholders, and that is only in the last six months. Does the Minister still stand by the Government’s decision to privatise Royal Mail?