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Address in Reply to Her Majesty's Most Gracious Speech

My Lords, I should like to add my congratulations to my noble friend Lord McKenzie of Luton on his promotion to our Front Bench. It will be a great pleasure to work with him in the future. Well done indeed. One of the main themes of the gracious Speech was driving forward our public services and improving the quality of life in our communities. An important part of that agenda will be the way in which the Royal Mail serves our communities and our businesses. I have been working with the Royal Mail, the Communication Workers Union and the Communication Managers Association—the two trade unions involved—for around four years, helping to improve industrial relations in the business. It has been a small contribution, but I hope that it has had some effect. Not only has it given me the opportunity to look at industrial relations within the Royal Mail, but also an insight into the other issues surrounding the business. It has helped me to gain informed opinions on what the business has to face and what will have to be tackled throughout the period of this Parliament. There is good news to celebrate with the Royal Mail. It is fair to say that Alan Leighton, Adam Crozier and their teams have started to turn the business around into a profit-making organisation, if one discounts the pension fund deficit, a matter on which I do not intend to delay the House today but which is the subject of a wide-ranging examination. At the same time they have improved the quality of the service. That has not been done painlessly. The workforce has had to contribute to it. Some 33,000 jobs have been lost, along with the closure of 2,500 post offices. As the business moves forward we shall probably see more casualties. As I say, it is not a painless process by any means. I think it needs to be highlighted that all this has been done with the co-operation in particular of the Communication Workers Union. The leadership of the business has to be married to the leadership of the union. The general secretary of the CWU, along with his deputy and the members, has implemented the single delivery system which everyone said would be nigh-on impossible to achieve successfully. That move has formed the basis of much of the economic good fortune of the business, and both the management and the unions should be congratulated on that achievement. What also needs to be built on is the achievement of working together and co-operating to face difficult problems jointly. Mr Leighton has already said that there is still a huge amount to do, and I am sure that he would be the first to admit that although the books have been balanced, the culture of the business has not been changed. There is still a basic "them and us" feeling between the management and the workers. There is still too much command and control from the top, and too much bullying and harassment at work. All these issues are being addressed and it is fair to say that good work has been done, but there is also a need to keep on changing. I believe that the key to success and further improvement lies in a combination of Alan Leighton's undoubted entrepreneurial flair and a recognition that he is still not quite there and that the business and the union will have to change the culture together. It cannot be done by the management alone; the union has an important role to play. I do not believe, as some have said, that either Alan Leighton or Adam Crozier are anti union. It is not a fair criticism. However, it is probably fair to say that they do not yet fully appreciate the value that the union can bring in changing the culture of the business. The union is often still seen as a problem to be dealt with along the way instead of as an ally in bringing about change. That needs to be worked on. I admit that there is work for the union to do in this respect. Unions cannot stand still, they have to modernise and change themselves to fit the business and the workforce. David Ward, the deputy general secretary, has a particularly fine strategic grasp of what the union needs to do and he is making changes that will help it to contribute to the business. So the period ahead is both exciting and challenging, and is certainly better than the period we faced during the previous Parliament. We will have honest and open dialogue and will seek co-operation and agreement between all those involved. There is one outstanding and additional matter that does not seem to go away, which is the issue of ownership. Some journalists need to get it right that the Labour Party manifesto says that the Government have no plans to privatise: "Our aim is to see a publicly owned Royal Mail fully restored to good health, providing customers with an excellent service and its employees with rewarding employment". They are on track to do that. A further commitment made in the manifesto is to review the impact of market liberalisation. Everyone should welcome that, and I suggest that it needs to be undertaken pretty rapidly so that we can cope with what is happening in the mail economies of both France and Germany. As to the issue of ownership, we are all being exposed to a daily diet of propaganda about the changes that may or may not take place. We read—I do not know whether it is true—that the chairman wants to privatise 51 per cent of the company on behalf of the staff; we read that some directors are interested in an arrangement similar to that applying in the John Lewis Partnership. It is wrong that such matters should be publicly discussed in this way over the heads of the people who would be affected. We know that the unions stand four-square with the Government. It is obvious that that is where they will be and that they will not have any plans for privatisation given the commitment in the Labour Party manifesto. Again, that is common sense. But the relentless drip feed of media stories is building mistrust and suspicion, which is not the way to proceed in a modern business. I passionately believe that progressing the issue of ownership in this way can do a great deal of damage to the good work being done to improve business performance. It will set people back and the CWU leadership, which has been progressive and open in making these changes, will be backed into a corner. It has no choice but to defend Labour's manifesto commitment and, as we have seen in the past, if this progressive and important agenda is pursued without proper consultation the union will withdraw from it, and that would be detrimental to all concerned. It is not my purpose or role to be involved in the issue of ownership but I feel that I have to comment on the way in which the issue is being pursued. I would ask that this hugely important subject, which affects the lives of all those in the Royal Mail workforce and its customer services, should not be dealt with by media briefings but by private, sensible, round table discussions. These must include the management, the unions and the Government setting out on the table the ideas and the possibilities so that people can have an adult, grown-up discussion about what is in the best interests of the business. There is no hostility inside the union towards discussing ways of raising finance and improving the business—as I have said, it has moved a long way in that respect—but there is deep and widespread opposition to being taken into any form of privatisation through media manipulation and being faced with a fait accompli before people—and the workforce in particular—have had a proper opportunity to express their view.