[Rushanara Ali in the Chair]
I beg to move,
That this House has considered Royal Mail services and the covid-19 pandemic.
It is a great pleasure to see you in the Chair today, Ms Ali. This is the third debate that I have secured on the performance of Royal Mail in as many years. I have done so because, as a company, Royal Mail is continuing to fail residents and businesses in my constituency and in many places across the country.
Royal Mail provides a vital frontline service. Throughout the covid-19 pandemic, postal workers continued to go to work to deliver letters and parcels, and, in addition to their core responsibilities, often provided vital contact for vulnerable residents living on their own during lockdown. I pay tribute to their bravery, dedication and service. I regularly meet postal workers in my constituency and representatives from their union, the Communication Workers Union. I am absolutely clear that the issue at Royal Mail is a failure of management and that the problems are structural.
The problems with Royal Mail first came to prominence in my constituency in 2017 when it announced plans to close two delivery offices in my constituency: the SE22 delivery office on Silvester Road and the SE27 delivery office on Windsor Grove. It was clear to local residents and elected representatives that the closures would be a disaster for postal delivery services. Following a large campaign, Royal Mail decided not to close the SE27 delivery office, but it pressed ahead with the closure of the SE22 office in autumn 2018, shortly before Christmas.
The closure of the SE22 delivery office heralded a disastrous deterioration in the reliability of postal services for local residents in the SE22 area. The delivery office was merged with the SE15 delivery office in Peckham, which is too small to cope with the volume of parcels for two postcode areas. It is located a considerable distance from the furthest parts of SE22 and the area has challenging topography. When the office initially closed, it is no exaggeration to say that services collapsed, with many streets not receiving postal deliveries for days or weeks at a time and customers having to queue for hours to pick up parcels. The situation was completely chaotic.
Following the initial Christmas peak in 2018, services improved somewhat, but ever since that time it has been clear that Royal Mail has no resilience in the SE15 delivery office and can maintain a satisfactory level of service only when all conditions are optimal. Whenever there are any increased pressures due to peak periods, staff sickness or adverse weather, the service in large parts of SE22 quickly becomes completely unreliable.
The consequences of poor and unreliable postal delivery services for my constituents have been severe. I have heard from constituents who have missed medical appointments or, perhaps even worse during the pandemic, turned up at hospital for appointments that had been cancelled. They have lost important legal documents and have had to attend court because they missed the deadline for paying speeding fines.
During the pandemic there have been many heart-rending stories that illustrate the important role that postal services still play in people’s lives, including children not receiving any birthday cards during lockdown, handmade gifts from grandparents for newborn babies not being delivered, and residents who have been relying on post from family and friends to fend off loneliness and isolation waiting weeks at a time for their post.
In addition, my constituency is home to the Mark Allen Group—a magazine publisher that produces 114 publications, including Farmers Weekly, which is delivered nationwide on Fridays. The publisher has highlighted the unreliability of postal delivery services in many parts of the country as a serious threat to the viability of its business. It has noticed significant subscription cancellations, which correspond with unreliable postal delivery services.
Magazine publishers are worth £3.74 billion to the UK economy and employ more than 55,000 people. The Mark Allen Group in my constituency supports hundreds of jobs in journalism, printing and distribution. It is reliant on Royal Mail for the sustainability of its business. It is no exaggeration to say that the Royal Mail failures are putting jobs at risk. Citizens Advice, the consumer advocate for the postal sector, also confirms that the kinds of failures seen in my constituency are common across the country. It estimates that 16.5 million customers were hit by letter delays in January 2021, and 15 million were left waiting for letters during the festive period 2021-22. It also highlights the rapidly increasing cost of Royal Mail services. The price of a first-class stamp has increased by almost 50% in just five years, leaving customers paying much more for a poorer service.
I have engaged extensively with Royal Mail, the CWU and Ofcom since 2017 about the problems in SE22, and during the covid-19 pandemic problems in other postcode areas in my constituency, especially SE19, SE24 and SE27. My engagement with Ofcom has been, frankly, extremely disappointing. There appeared to be very little interest in the severe problems affecting my constituents, and no meaningful action that Ofcom, as the regulator, was willing or able to take in response. It is clear to me that there are considerable problems with the regulatory framework that have made it impossible for Royal Mail to be held to account when its services fail.
I believe that five measures are urgently needed to put this situation right. There is currently no requirement on Royal Mail to undertake public consultation on a decision to close a delivery office, despite the obvious significant impact that a closure can have on a local community. In the case of SE22, every single concern that local residents raised about the closure has come to pass. Royal Mail sold the SE22 delivery office for £7 million. There was no requirement to reinvest any of the receipt in the provision of local services. I urge the Minister to ask Ofcom to introduce a new requirement for meaningful public consultation on delivery office closures, and to instigate an independent analysis of the impact on local services that must be submitted to Ofcom and signed off before a closure can take place. We will not accept further delivery office closures in Dulwich and West Norwood.
Royal Mail is required only to report quality of service data at the level of the first part of the postcode. That has consistently meant that the catastrophically poor performance in SE22 and other postcodes in my constituency has been masked by performance data across the wider SE postcode area, which covers a vast swathe of south-east London. In effect, that has made it impossible to secure any regulatory action for my constituents. I have made repeated requests over a number of years for Royal Mail to provide more granular performance data, and they have always been refused. That gives rise to concerns about transparency and accountability. I urge the Minister to ask Ofcom to require Royal Mail to report performance data at the level of local postcodes, so that regulatory action can be taken more easily on individual delivery offices when they fail.
The partial suspension of the universal service obligation during the pandemic effectively removed all regulatory levers from Ofcom in relation to Royal Mail. Across many streets in my constituency, residents have reported periods when post was not delivered for weeks at a time. When I raised those problems with Royal Mail, it systematically denied the extent of the problem, refused to acknowledge backlogs of mail sitting in delivery offices—that miraculously were cleared when I made a short-notice visit to at least one of the delivery offices in question—and denied the extent of the gaps in delivery.
I am completely clear that Royal Mail has regularly been in breach of the USO in my constituency, but there has been no action from Ofcom, leaving Royal Mail entirely unaccountable for the quality of its services. The Government must therefore require Ofcom to review the universal service obligation to ensure that meaningful regulatory action can always be taken when there are breaches and, in circumstances in which the USO is partially or fully suspended, that there is no vacuum of regulation.
Finally, it is unacceptable for the public to be asked to pay more for less, particularly at a time when the cost of living crisis is bearing down on so many people across the country. I ask the Minister to respond to the request from Citizens Advice and to ask Ofcom to carry out a full assessment of the affordability of postal products, in the light of the jump in first-class stamp prices. My constituents are utterly exasperated by the lack of action from Royal Mail, Ofcom and the Government in response to the failures of Royal Mail in my constituency. The privatisation of this vital public service by the Tories and the Lib Dems has failed. The Government must urgently get a grip.
It is a pleasure to serve under your chairmanship, Ms Ali. I congratulate the hon. Member for Dulwich and West Norwood (Helen Hayes) on securing this important debate. I would like to associate myself with the appreciative comments she made about postal workers.
My experience of postal deliveries came with my first opportunity to visit sorting offices in my constituency last Christmas, after covid restrictions were relaxed. I visited the sorting offices in Carlton and Arnold in Gedling. I was struck by the very close working conditions under which postal workers operate when sorting the post, working cheek by jowl. Although there was a good working atmosphere in both sorting offices, I congratulate them on their tenacity for working in such difficult conditions throughout the pandemic; it must have been a very difficult time.
The service in Arnold has remained very good, but there were serious concerns about delivery of post in Carlton. Medical appointment letters arrived after the appointment date, and birthday cards arrived late. A useful indicator of whether an individual or the system is at fault is the arrival of cards; when several birthday cards arrive after a birthday, that is a useful indicator that the system itself is at fault.
Some of my constituents received 10 or 14 days-worth of post at the same time, in one go after a long gap. That was initially ascribed to staff shortages and so forth as a result of covid, but on further investigation that seemed not necessarily to be the prime mover. Particularly at Carlton, new walk routes had been introduced and implemented because that sorting office was serving a lot more points than previously. Once the new system was implemented, it stuttered on day one, and a lot of work was required to resolve significant teething problems and iron out that problem, to get back to an acceptable level of service.
I had good meetings with Royal Mail on the matter. I also praise the members of the Communication Workers Union I met to discuss it. I hope that, as a Conservative MP, I do not damage their street cred too much by singling out Ian Pointer and Steve Blower for particular praise, as they gave me a thorough and considered briefing on the subject. As I stand here today, it looks as though the problems in Carlton have simmered somewhat. I am gaining significantly fewer emails in my inbox on the subject, so it appears to be resolved.
I want to use this opportunity to thank Royal Mail and its staff, who have worked so hard to resolve the issues in Carlton, and for stepping up to meet that challenge in difficult circumstances.
It is a pleasure to serve under your chairship, Ms Ali. I congratulate my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) on securing this important debate. Like her, I thank the staff at Royal Mail for their hard work in keeping communities connected throughout the covid pandemic. It was such a difficult time for everybody, but they continued to strive to work extremely hard, delivering parcels throughout my constituency of Cynon Valley.
As others have mentioned, I have a good connection with local postal workers, especially the trade union representatives. I make particular mention of Amarjite Singh, branch secretary for south-east Wales, and our local CWU rep, Jason Richards, who has been instrumental in the re-establishment of our trades council locally, which is fantastic.
Over the past two years, during periods of widespread lockdown or personal isolation, Royal Mail deliveries have been a lifeline and kept people supplied, including with the special delivery of coronavirus test kits. The postal workers were part of the key worker service provision that kept the country running, even when many of them suffered from covid; we have to thank them for their work.
As has been outlined, the difficulties in meeting delivery targets during the pandemic were understandable from the perspective of postal workers. Increased parcel volumes, social distancing requirements, and staff absences were all contributory factors. The suspension of Royal Mail’s regulatory targets as a designated universal service provider in 2020-21 was a welcome move. The service came in for much criticism and many complaints, which had a detrimental impact on the morale of staff, who—from my significant dealings with them—are absolutely committed to providing a high-quality service.
Three areas of concern have been brought to my attention that could assist in securing a return to the delivery of a world-class postal service if work were undertaken. The first relates to covid and staff sickness. While over the past two years employees battled with the impact of covid, Royal Mail discounted covid absences from the sickness absence procedure. With restrictions having lifted, that is no longer the case. Given the public-facing nature of the work involved and the close working environment, it is essential to ensure that in all instances, both staff and the public are adequately protected from the risks of covid. Although I understand Royal Mail’s policy is that staff are advised to remain at home if they have covid symptoms or test positive, I would be most concerned—as, I am sure, would other Members—if there were evidence that practice did not always follow that policy. Staff should never feel pressured to come into work in such circumstances. I would be interested to hear the Minister’s views on that.
The second area relates to steps to improve service provision, service quality and standards. It is welcome to hear that the CWU and Royal Mail recently set up a joint national quality of service steering group to monitor progress and address any barriers to achieving quality of service objectives. In my opinion, Royal Mail should be provided with more regulatory freedom to innovate, grow, and improve postal services. Allowing Royal Mail to introduce tracking facilities for a universal postal service is a key action that Ofcom could take to improve postal services. Ofcom is opposed to that, but the CWU argues that tracking in the universal service obligation would deliver better outcomes for customers and ensure that the USO evolves with user expectations. Further, it is essential that Royal Mail is reunited with the Post Office and returned to public ownership. An integrated postal, retail and delivery network would boost postal revenue potential and service quality, thereby benefiting customers.
The final area relates to job security, staffing levels, and terms and conditions. Recent media coverage reports that Royal Mail is planning to sack about 900 managers and bring in lower rates of pay in what Unite the union has said is another case of fire and rehire. The Royal Mail workforce is already depleted, having suffered in excess of 1,500 job cuts in 2021, leaving the service seriously understaffed and struggling to meet targets. A recent survey of Unite members revealed that the service depends on the willingness of members to undertake unpaid work, with members readily going without lunch breaks, working unpaid at weekends and even forgoing annual leave to provide the quality service that those workers want to provide to constituents.
Unite the union claims that job cuts are driven by shareholder greed—a view I share—despite the service having returned a record £311 million in profits, and that the business’s real plan is to eventually cut the six-day delivery service altogether and move to a three-day service model, as is the case in European countries such as Denmark. Sharon Graham has called on Royal Mail to step back from making any cuts. In her words:
“Royal Mail has no excuse for announcing these job cuts, especially at the same time as introducing ‘new’ bands on lower pay. That is just ‘fire and rehire’. They are not even losing money. Royal Mail’s private shareholders are doing very nicely…This is shameless boardroom greed looking to ruin a great UK name and a 500-year-old essential service.”
In this cost of living crisis, it would be remiss of me not to say that staff deserve an inflation-proof pay rise. CWU workers in Wales have relayed to me their concerns about the pay discussions in Royal Mail and have written to the Royal Mail Group chief executive in February and, following the lack of response, published an open letter to bring the union’s concerns into the open. The union made it clear that it found the delay in announcing the pay offer unacceptable given the cost of living crisis, and that the company is undermining trust.
Local CWU members are very aware that the business recently paid dividends to its shareholders to the tune of £400 million. Indeed, as of January 2022, a total of £1,725 million had been paid out in dividends to Royal Mail shareholders since privatisation by the Conservative-Lib Dem Government in 2013. I therefore fully support the CWU’s calls for Royal Mail to be renationalised, which would allow for the money paid in dividends to shareholders to be reinvested in the business to retain staff, fund a significant pay rise, which the staff deserve, support growth and improve service quality.
I would like to know whether the Minister supports the call for an inflation-proof pay rise for postal workers, and indeed all key workers. That is, I believe, the right and necessary thing to do in this current crisis. Diolch yn fawr.
It is a pleasure to serve under your chairmanship, Ms Ali. I congratulate the hon. Member for Dulwich and West Norwood (Helen Hayes) on securing the debate and I associate myself with the words of appreciation for postal workers that have already been expressed.
The recent postal disruption in my constituency hit a peak in the latter half of last year, so unsurprisingly much of the correspondence I received centred on its impact on the festive season, with Christmas cards and presents sent in November not arriving until the new year. I first got in touch with Royal Mail about my concerns about the Amersham sorting office in September 2021. The original responses were inadequate. It initially assured me that the delays were temporary and that, although reduced, service to the affected areas was still regular and being delivered rotationally every other day. Based on the testimonies of constituents shared with me in the following weeks, that was in no way an accurate representation of the situation on the ground.
One elderly constituent missed two long-awaited hospital appointments as the letters did not arrive until after the appointments were scheduled. Another told me that they ended up in rent arrears and debt after a delay in the delivery of a bank card. The same constituent was left without any form of identification as they waited for a new driving licence and the other identity documentation to be returned to them.
Of course, we all understand that Royal Mail has been dealing with a pandemic, and I am well aware of the difficulties caused by staff absences as a result. I understand why Ofcom decided to grant an exemption to Royal Mail’s universal service obligation, but the level of service we have been left with in places has been completely unacceptable. A few days’ delay is one thing; a month’s is another. If exemptions are granted, there should be an obligation to clarify what is and is not acceptable.
Royal Mail conceded that, as well as the pandemic and staff shortages, the difficulties at Amersham sorting office related to changes to the delivery rounds. It transpired that entire streets were missed off the routes, so some people were getting no mail at all. I have been in regular contact with Royal Mail about that since the autumn, and by the end of January things were largely in a much better place, but I have started to receive the same messages about postal delays to my inbox all over again. That is nothing to do with the exceptionally committed postal workers; there is something going wrong at a higher level.
I echo my colleagues’ calls for more detailed data, broken down at a more focused level. It is clear that reporting does not paint an accurate enough picture. In my area, the most severe disruption focused on the HP6, HP7 and HP8 areas. To ensure a more consistent service, Ofcom must require Royal Mail to provide more detailed data in order to root out the problems plaguing service delivery. Holding Royal Mail to account is desperately needed. The hard-working postal workers I have spoken to are not responsible for the backlog they are trying to clear.
It is a pleasure to serve under your chairship, Ms Ali. I thank my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) for securing this important debate, following an unprecedented two years in which Royal Mail staff worked at the coalface of the pandemic to ensure that vital services continued and that our country remained connected. I refer the House to my entry in the Register of Members’ Financial Interests and, in particular, to my membership of trade unions.
As with all key workers, we owe Royal Mail’s workforce a debt of gratitude for performing heroically in the face of the covid crisis, which claimed the lives of many of their colleagues on the frontline. I also thank to the Communication Workers Union for its leadership throughout that period, ensuring that the concerns of all Royal Mail staff were listened to and acted on. The CWU always works tirelessly, and never more so than in the past two years, when it has ensured that the interests of all postal workers—including health and safety concerns—were listened to. The CWU and all Royal Mail staff have gone above and beyond to serve our communities throughout the pandemic.
My local branch—the CWU North West Central Amalgamated Branch, which represents more than 2,500 postal workers—continued despite sadly losing one of its own members to covid. Mr Ian Wilson was based at the Royal Mail delivery centre in my constituency. His death left an enormous hole in the union, which he first joined in 1978 before working as a Royal Mail driver in Stockport. Ian was a loyal, hard-working public servant who was liked by everybody he came into contact with. He continues to be missed dearly by all those who knew and loved him.
Local CWU branch secretary Mr Dave Kennedy was forced to source and fund PPE himself from a local company early on in the pandemic. I thank Dave and all CWU branch officers for their work on that. The lack of PPE at the start of the pandemic remains nothing short of a disgrace. Royal Mail staff always deliver for our country and never more so than during the pandemic, when it was awarded the Government contract for the testing programme; staff had to work around the clock, seven days a week, to deliver and collect test kits from households, playing an enormous role in helping to contain the spread of the virus. They often did so in the face of considerable hurdles. When social distancing restrictions were in place, only one member of staff was allowed per van, which led to a shortage of vehicles and instances of staff members being forced to walk—in one case, up to 3 miles—before starting a shift. The efforts of the CWU’s cleaning membership in sterilising all vehicles, touchpoints and work areas undoubtedly also helped to limit the spread of the virus.
The already challenging situation was made worse by of a lack of support by senior management. Royal Mail did not take advantage of the furlough scheme for clinically extremely vulnerable staff members. Instead, it recorded any resulting absences as sickness absences, which led to members exhausting their sick pay entitlement and suffering significant financial hardship. Instead of supporting the workforce, Royal Mail bosses directed sick staff members to a national charity for help. It was only after many weeks of the pandemic—and following the intervention of the CWU—that the situation was resolved.
Things could have been very different if Royal Mail had remained in public hands and the bottom line was not what mattered most to its senior leadership. It remains a national tragedy that the Conservative-Lib Dem coalition Government sold off one of the UK’s crown jewels in 2014—the biggest privatisation since that of the railways in 1994, when the Conservative Administration flogged off another of our country’s greatest assets.
Almost a decade on from the sale and millions of recklessly wasted taxpayer pounds later, there remains no justification for having privatised the organisation. As we all know, Royal Mail was making a profit and providing a high-quality public service to everyone in the UK. That profit now goes straight to private shareholders, with £800 million lining their pockets between 2013 and 2017 alone. Research by We Own It and the New Economics Foundation revealed that, by 2025—just a decade after the sale—the country will be worse off than if Royal Mail had remained public. Almost 70% of the public support a publicly owned Royal Mail, which, research shows, would save us £171 million a year—enough to open 342 new Crown post offices with post banks. It is time to bring Royal Mail back into public hands, where it belongs.
Scandalously, we have seen a nationwide attack against Crown post office branches. The Royal Mail is not to blame for that; this short-sighted Government are. I am proud to have a Crown post office branch in my constituency, just a short walk from my constituency office. My community needs that branch, and I will do all I can to stop its closure. It is staffed by unionised civil servants, unlike the concessions often operated by retail brands, which simply do not offer all the services of a Crown branch.
Last year, following the CWU’s “Save our Post Office” campaign, I was delighted that controversial franchising plans for my local branch were overturned. Crown branches are at the heart of many communities like my own, and we must ensure that other branches are not relocated or downgraded to a retail partner.
I agree with my hon. Friend the Member for Cynon Valley (Beth Winter) that the Royal Mail and the Post Office should be integrated and come under public ownership. I also agree with the comments made by my hon. Friend the Member for Dulwich and West Norwood.
Once again, I want to take this opportunity to place on record my thanks to all Royal Mail staff, CWU members and the Communication Workers Union for consistently going above and beyond to keep our country connected at a time when it faced the very real prospect of being ground to a halt by covid. Their efforts will not be forgotten. I thank them on behalf of my constituents.
It is a pleasure to service under your chairship today, Ms Ali. I congratulate my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) on securing this important debate and thank all hon. Members who have spoken. I will reflect almost all their comments in my remarks this afternoon.
The postal industry is hugely important to the well-being of our country. The covid-19 pandemic highlighted the importance of the service and of its workforce. For the past two years, Royal Mail workers have selflessly provided key services delivering vaccinations, shielding letters, covid-19 tests and PPE items, as well as enabling people to communicate with their loved ones when they were unable to visit them in person. It is right that today we have heard hon. Members across the House recognise them for their extraordinary efforts. It is also important that we review together how we can better hold Royal Mail management to account. I want to mention one of my constituents, Councillor Poonam Dhillon, who was a dedicated Royal Mail worker who sadly died of covid last year.
Royal Mail has a long and storied history dating back to 1516, roughly taking the shape that we know today in the 19th century with the introduction of the first stamp in 1840 and with the first pillar box erected in 1852. Those were important reforms, as was the setting of a duty on the postal service across our islands that Royal Mail must deliver to every address in the UK six days a week at a uniform price.
The Postal Services Act 2011 gave a statutory basis to the universal service order, which defines what should be considered part of the universal postal service. The Act sets out the minimal requirements that Royal Mail must deliver. The USO can be amended by Ofcom, which designates regulatory conditions, including pricing and performance targets.
The Royal Mail is the UK’s universal services provider, which is a sign of the respect and trust we have placed in the postal service in our country. A character in a book by Anthony Trollope, the Victorian novelist who also invented the pillar box, once exclaimed of the stamp: “Surely this little Queen’s head here can’t be untrue!”.
Trust matters, yet trust in this very significant public service has been significantly weakened since Royal Mail was privatised by the coalition Government in 2014. The Business, Innovation and Skills Committee at the time concluded that it had been undervalued in that sale by David Cameron’s Government—to the tune of £1 billion to the taxpayer.
What was the result? In 2020-21, Royal Mail significantly missed its targets that a minimum of 93% of first-class mail is delivered the next working day and a minimum of 98.5% of second-class mail is delivered within three working days. Just 74.7% of first-class mail and 93.7% of second-class mail met those service targets.
Although we all acknowledge the unique conditions of the pandemic, during which sickness eroded staffing levels and isolation increased the parcel load, data from Citizens Advice’s 2022 state of the sector report suggests that the service has not recovered. It found that at the beginning and end of 2021, letter delays were widespread across the country. During Christmas last year, almost 15 million people were left waiting for post. Over half of those reported going at least a week without letters, as we have heard today.
In previous debates, Members have complained about mail arriving late for their constituents and, worryingly, the Citizens Advice report also found that one in 14 UK adults had experienced serious negative consequences of struggling to receive their post, missing important documents such as insurance letters or fines. Last July, Royal Mail committed to returning to pre-pandemic quality by the end of August, but as the CA report makes clear, it did not. In response to this persistent failure to meet its targets, Ofcom has told Royal Mail that it must take steps to improve performance as the effects of the pandemic subside.
May I ask the Minister what expectations the Government have of Royal Mail for the timescale in which its performance will return to pre-pandemic levels? Will he tell the House what discussions he has had with Ofcom about the next steps for Royal Mail, and say what potential repercussions Royal Mail executives could face if they do not meet their targets?
Although Ofcom has the power to fine Royal Mail, as it did in response to missed delivery targets in 2018 and 2019, more stringent measures might need to be taken. A further significant issue has been the closure of Royal Mail delivery offices and the impact of such closures in some areas is still very much ongoing. My hon. Friend the Member for Dulwich and West Norwood has been a dedicated campaigner for her constituency ever since the SE22 delivery office was closed in 2018. She spoke very powerfully about that closure in her speech today. Despite being warned by my hon. Friend and community stakeholders that that closure would make delivery more difficult, Royal Mail pressed forward and closed the delivery office in East Dulwich anyway. That decision continues to impact the performance and services that local businesses and residents are receiving. My hon. Friend has also talked about there being no resilience in the SE15 service, and the poor and unreliable services for a range of her constituents. We need to look at the measures that have been raised today, including reporting at a more detailed postcode level, because transparency is not the enemy of democracy.
Royal Mail’s recent history has raised concern that it seems to be driven by a mission to increase dividends for shareholders ahead of genuinely fulfilling its responsibilities as the nation’s universal service provider. Following the cuts of 2,000 managerial roles in 2020-21, in January this year Royal Mail revealed plans to cut a further 1,000 management jobs. Although Royal Mail has said that cuts are intended to streamline operational management and to improve focus on performance at a local level, they come in a year of record-breaking profits for shareholders and an increase in the cost of first-class stamps of nearly 12%. At the same time, Royal Mail will bring in a lower-paid managerial role, in a move that Unite the union has compared to fire and rehire practices. That is absurd at a time when the service is already struggling to meet basic performance targets and when data suggests that Royal Mail has the capital needed to make investments without such a scale of job losses.
Will the Minister say what discussions he has had with Royal Mail and the relevant trade unions—Unite and the Communication Workers Union—about the scale of job losses? Has he discussed the service’s prospective plan to streamline operational management in terms of equipment, transformation for future business and staffing? Does he recognise the work of the unions, including the CWU’s acknowledgement of the need for modernisation? That need is understood: unions want to work with management to reform an organisation that their members work for with pride.
May I also ask the Minister whether he has considered the CWU’s proposal to integrate a high level of corporate social responsibility on environmental issues and employment standards into the postal regulatory framework? What discussions has he had about the affordability of postal products?
We need better communication with Parliament. As Royal Mail moves into a new regulatory framework for 2022 to 2028, I want it to be open to better communications with Parliament, stakeholders and communities. Although Royal Mail is technically independent of Government and overseen by Ofcom, it remains an essential public service. Yet it has been hit by a decade-high rate of more than 1 million complaints and high sickness absence rates. There were boosts otherwise for shareholders last year, as parcels helped Royal Mail to achieve a £311 million profit. For that reason, Labour will continue to call for Royal Mail to be held more strongly to account, for the Government to actively listen to the debate and for a better postal service in all parts of our nation, as the public expect and demand.
It is a pleasure to serve under your chairmanship, Ms Ali.
I congratulate the hon. Member for Dulwich and West Norwood (Helen Hayes) on securing today’s important debate about Royal Mail’s services and the covid-19 pandemic. Clearly, this is not the first time that we have discussed the issues—the ongoing issues—in her constituency. I am sure that we will continue the conversation, and it is important that we do, so I am glad that she has had the chance to air her views in this debate. I hope that Royal Mail continues to respond and to engage constructively with her.
Before discussing the level of service overall, I would like to provide some context, outlining both the importance of and the pressures on postal services in the lead-up to the debate. We have heard today that the postal service has played a critical role in helping to mitigate the impact of coronavirus on individuals, families and businesses across the UK. We absolutely recognise that postal workers have been working incredibly hard to meet demand and deliver the universal service in incredibly difficult circumstances. We all rely on them to keep people connected across the country by delivering the letters and parcels that are so important to everyday life, and supporting the economy in these difficult times.
As the hon. Member for Dulwich and West Norwood is aware, Royal Mail’s contingency plans to mitigate disruption to postal services are well established. They are overseen by Ofcom, the independent regulator, which has been raised, so it is for Ofcom to monitor service levels, although Royal Mail has reassured Government that it has been doing everything it can to maintain service levels during the pandemic. I do look out for and try to support hon. Members’ inquiries with Royal Mail when those are raised, as has been the case today—for example, my hon. Friend the Member for Gedling (Tom Randall) raised the situation there.
Royal Mail has set out that improving service levels is its No. 1 priority at this stage, so although the situation is improving, it is clear that there are still issues that need to be addressed in certain areas. I do expect Ofcom to continue to challenge the business, under its regulatory framework, to ensure that it is delivering the best possible service. It was disappointing to hear otherwise from the hon. Member for Dulwich and West Norwood about the policy of engagement with Ofcom, which she said was missing in her exchanges. That is certainly regrettable to hear.
Overall—looking at the wider picture—customers continue to be satisfied with Royal Mail’s services. Ofcom’s last annual monitoring report, for 2020-21, which was published in December of last year, found that more than eight in 10 residential customers and around eight in 10 SME users are satisfied with Royal Mail. Those results are in line with Ofcom’s findings in its review of user needs published in November 2020. That general satisfaction is despite the challenges of delivering postal services during a pandemic.
The statutory framework recognises that, in an emergency, Royal Mail may not be able to sustain the universal postal service without interruption, suspension or restriction. I hope that hon. Members will agree that it was reasonable for Ofcom to acknowledge in this context that the pandemic was indeed an emergency. Therefore Royal Mail was legitimately able to modify its obligations, including by reducing the frequency of letter deliveries temporarily, for six weeks, in 2020. However, Ofcom’s declared emergency regulatory period ended on 31 August 2021 as Royal Mail implemented its improvement plan. Normal regulatory requirements have since applied, although in monitoring compliance Ofcom needs to take account of any relevant matters beyond Royal Mail’s control that may impact on its performance. Throughout the pandemic, Royal Mail has been transparent about any changes to the services that it provides; that information can be found on the Royal Mail website.
Royal Mail’s quality of service results, published last month, indicated that it had not met its universal service obligation targets for the delivery of both first and second-class mail in the third quarter of the financial year. Royal Mail reported that that was due to high levels of covid-related isolation and to absences being at double the normal pre-pandemic levels at the peak of the omicron variant. That is something that we have heard from any number of sectors, and any number of businesses, beyond postal services. Royal Mail has also reported that hiring temporary staff to help to manage service issues proved very challenging because of the combination of very high competition for temporary staff and high infection rates across the population. Despite those challenges, postmen and women worked exceptionally hard to ensure that the delivery of covid-19 test kits was prioritised. Royal Mail responded to the Government’s call to double the volume of covid test deliveries within days, and Royal Mail next-day delivery for kits exceeded 98%.
Royal Mail accepts and acknowledges that its quality of service has not always been as it would have wished, and has publicly apologised for any resulting delays that customers may have experienced in their local areas. It has reassured me that it continues to work to improve service levels, having spent more than £340 million in the last financial year on overtime, additional temporary staff and sick pay, as well as providing targeted support for the offices most impacted by staff absences. Royal Mail also publishes a daily list of the delivery offices most impacted by service delays. I understand that near the start of the year 77 local delivery offices were listed on the website, and that number had been reduced to one as of last week, indicating the progress that has been made.
I would like to take some time to say something about local service disruptions, particularly in regard to the constituency of the hon. Member for Dulwich and West Norwood. I know from correspondence with her that this is, unfortunately, not a new issue and that she has been in contact with Royal Mail about service issues in the area.
Royal Mail has informed me that the service was disrupted because sickness absence levels in some part of its operation remained higher than normal—East Dulwich delivery office in particular has been experiencing high levels of sickness. Royal Mail has taken measures to tackle the issue, including rotating mail deliveries to addresses so that customers receive mail as frequently as possible.
The hon. Member said she had recently visited the East Dulwich, Herne Hill and West Norwood delivery offices to see the measures first hand. I encourage others to do the same—to go into sorting offices and meet the management, as well as saying thank you to the workers. It is good to see what managers are doing. Hon. Members have mentioned changes of route, which tend to be put together by managers in the sorting office, close to those who walk the beat.
I understand that mail deliveries for the delivery offices that the hon. Member for Dulwich and West Norwood visited have been taking place six days a week, barring occasional unforeseen disruptions, such as Storm Eunice and a spike in absences since February. I am also aware that Royal Mail has introduced operational changes to its network as part of its wider transformational plans. Modernising Royal Mail operations is necessary to maintain sustainable universal postal services and deliver better outcomes for customers.
I thank the Minister for giving way—I have always found him to be polite and helpful in my engagements with him. On the point about customer service and universal connectivity, can I press him on the issue of Crown post offices? The UK seems to be one of the only nations in the world where counter services are dis-integrated from delivery services—it does not even happen in the USA. I am one of the lucky MPs in Greater Manchester to have a Crown post office branch in their constituency. Can the Minister give me some assurance that the Government will not continue to close such branches or downgrade them to retail outlets?
I cannot give the hon. Member that assurance, because he is referring to Post Office Ltd, which was disentangled from Royal Mail at the time of sale. Post Office Ltd oversees franchised post offices and owns and runs Crown post offices, and it is going through its own modernisation programme. The financial situation of the Post Office has been well rehearsed, including the backdrop of the Horizon situation. Allowing Royal Mail to work through its own modernisation programme disentangled from that scenario is not necessarily a bad thing.
The hon. Member for Dulwich and West Norwood was elected at the same time as me; in those seven years, I have seen a huge difference when I go to the sorting offices each Christmas in the balance between letters and parcels. Royal Mail has had to change all the racks and systems to adapt to the big drift to more and more parcels being delivered and fewer and fewer letters.
I accept the point about the change in letter and parcel volumes. My broader point, as we are here talking about Royal Mail, is that Crown post office branches offer services that other post offices do not. It is about not just letters, but banking services, insurance and so on. Every MP in this room will have people in their constituency who do not have access to broadband or a telephone and who depend on those branches. I will perhaps write to the Minister and he can come back to me on my local Crown branch.
I do not want to be tempted into debating Crown post offices in this debate, but I would be happy to exchange correspondence with the hon. Member. He raises some important issues about access to cash and banking services. The future of the Post Office is very close to my heart. I want to make sure that we provide something that meets customer demand and is acceptable in this place, and that retains the social value we put on post offices while getting the fine balance right in terms of providing a solid financial footing—we should get that and more in a post office for the future. I will gladly engage with the hon. Member on that issue after the debate.
I am aware, as I said, that Royal Mail has introduced changes to its network. Modernising Royal Mail operations is necessary to maintaining that sustainable universal postal service and delivering those better outcomes for customers. However, in the immediate term, that may have contributed to local service issues while the business adapts to changes. It is always difficult to embrace and work through change, but Royal Mail has assured Government that if for any reason an address does not receive a mail delivery one day it will be a priority the next working day.
Royal Mail is open to engaging with the public, and indeed with all MPs about delivery services in their respective constituencies and across the UK. I urge any hon. Members whose constituents are not happy with the service they receive to take that up with Royal Mail. I have always found it engaging, but I am also here to help expedite things, if that does not work.
Ofcom is aware of continuing reports of delivery delays, and it issued a statement on 19 January expressing its concerns and making it clear to Royal Mail that it must take steps to improve its performance as the worst effects of the pandemic subside. As the regulator, it is ultimately for Ofcom to determine whether Royal Mail is meeting its statutory obligations. Ofcom has the powers to investigate and take enforcement action if Royal Mail fails to achieve its performance targets, without good justification, at the end of each financial year. That includes penalising Royal Mail for failing to meet its targets, as Ofcom did when it imposed a fine of £1.5 million on the business for missing its first-class delivery target for 2018-19.
Ofcom reviewed Royal Mail’s performance against its quality of service targets in 2020-21 and in the light of the impacts of covid-19 throughout that year decided not to open an investigation. However, Ofcom continues to scrutinise performance closely. It is currently preparing to review Royal Mail’s performance for the 2021-22 financial year and, if appropriate, it will not hesitate to act where necessary.
I would add that Ofcom must ensure that postal regulation keeps pace with the changes in the market and remains relevant, fit for purpose and effective. It last reviewed the regulatory framework for post in 2017 and said at the time that it should remain in place until 2022. It is now carrying out a further review of the future regulatory framework, which it aims to complete later this year. As part of that review, Ofcom ran a consultation on its proposals, from 9 December 2021 to 3 March 2022. It is currently considering the responses and expects to issue a statement in the summer.
A couple of quick questions were asked. The Government do not have any plans to renationalise Royal Mail. The sale of Royal Mail shares in 2013 and 2015 added £3.3 billion to public funds. In addition, we heard a lot about dividends, but not about the £2 billion that has been invested in the firm since privatisation, with a further £1.8 billion announced in 2019 for the following five years. Access to private capital, as with any other large, successful business, has enabled the investment necessary to innovate and seize the opportunities presented by new markets.
As I said, I want to ensure that I can help any hon. Member, should they have problems with their deliveries in the short term. I have found Royal Mail to be particularly proactive in engaging with hon. Members, should there be longer-term issues, and it does come back in good time. However, should it not, I am here to help expedite things, as I said.
There have been exceptional challenges in the last two years, and services have been disrupted. However, the postal system has continued to operate, and Royal Mail is now able to resume normal service levels as absence levels move closer to normal and as the business adjusts to operational changes. I want to take this opportunity to once again thank Royal Mail, and all postal workers, for the dedication and commitment shown while providing continued service throughout the pandemic.
I thank all hon. Members who have contributed to the debate. Two themes have run consistently through many of the contributions. The first is gratitude and appreciation for frontline postal delivery workers and acknowledgment of all that they have done during the pandemic, and I reiterate that once again. We are grateful to our postal workers up and down the country for the vital work they do.
The second theme is the frequent mismatch between the messages we all receive from Royal Mail as constituency MPs and the experiences of our constituents. I recognised, almost verbatim, the experience reported by the hon. Member for Chesham and Amersham (Sarah Green) of being told by Royal Mail that deliveries were being alternated every other day in her constituency, and yet residents were reporting that they were not receiving post for weeks at a time. That has absolutely been my experience. The problem is not the timeliness of the response from Royal Mail; it is that it simply does not chime with the experiences of our constituents. They have no reason to exaggerate or make up their experiences of the postal delivery services. If post is arriving, there is not a problem. Yet, time and again people report that there is a problem. I am grateful to the Minister for his continued engagement on this issue, and I am sure that, like Royal Mail managers in my constituency, he is sick of hearing from me about it, but we will not rest, because Royal Mail’s services are so important.
I am disappointed that the Minister did not address the data reporting issue, which is critical. Royal Mail cannot be held accountable for local delivery office failures, which matter so much in specific communities, if it has to report its performance data only at a very broad level. The same is true of national satisfaction survey reporting: hearing that 80% of customers are happy is no comfort if someone lives in SE22 when the SE22 delivery office is failing.
I urge the Minister to step back from the briefings he receives from Royal Mail and Ofcom, to look at what people across the country are saying about the quality of the services they receive and to think about the role Government can play in getting a grip on what I believe is a failing organisation and in making sure that Royal Mail continues to deliver the post, but does so with a reliability that such a vital service demands across the country.
Question put and agreed to.
That this House has considered Royal Mail services and the covid-19 pandemic.