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Royal Mail

May I thank the Minister for sight of his statement? We welcome Richard Hooper's report, which confirms what everyone has known for a long time. Royal Mail's working practices are inefficient, competition is intensifying, industrial relations are poor and sorting machinery is outdated. The fixed price of a stamp and Royal Mail's huge pension deficit seriously limit its room for manoeuvre. All that has been clear for a decade, but the Government have done little to curtail a precipitous decline in Royal Mail's fortunes. Today we learn that the Government are trying to strike a deal to see them through the next election. They are trying to look like the saviour of Royal Mail, but are doing so in flagrant breach of their election manifesto and by raiding the pension fund to bail out Government borrowing. Even though the Minister's own party does not seem prepared to do so, we on the Conservative Benches broadly welcome his intention to introduce a new commercial partner. It is a step in the right direction, but the details remain unclear. Will the Minister confirm the status and details of the plans? What will private partners be offered in exchange for their investment? Will he demand a commitment from them to invest in new sorting technology? Can he confirm whether the opportunity to buy a stake in Royal Mail will be put out for competitive tender? By what commercial method might he sell a stake, believed to be about 30 per cent., and can he guarantee that all the revenues from any sale will go directly to Royal Mail and not to the Government? The Government have had more than 10 years to deal with the problems that Hooper identifies, but they have completely failed to do so. In his first attempt as Business Secretary, Lord Mandelson said that the Government's policies would"““lead to greater investment in and strengthening of the local post office network, resulting in improved services to ordinary people in every part of the country,””" adding:"““Everyone stands to be a winner””.—[Official Report, 7 December 1998; Vol. 322, c. 24-36.]" Since then, almost 40 per cent. of all post offices have closed. Rather than creating innovative solutions to the problems facing the business, the Government have concentrated on managing its decline. During those 10 years, the Government could have cut costs, done deals, forged partnerships or even, as they are now doing, part-privatised the business. However, until now, they have done none of these things. They have not driven through efficiencies in Royal Mail management; they have not invested in new technology; and they have not dealt conclusively with the pensions deficit. So just as the Government have wasted 10 years mismanaging the country, they have also wasted 10 years mismanaging Royal Mail. Now, disguised in today's statement, is the truth. The Government intend to raid the pension fund in order to plug the black hole in the public finances, dumping the cost of a multi-billion pound liability on future generations. The seizure of £22 billion from Royal Mail's pension fund would make the Government's woeful borrowing figures look a little better, but it would saddle future generations with an almost open-ended bill. The whole process has been engineered to make a quick buck for the Prime Minister, kill the issue until after the next election and pass the biggest financial problem not only to the next Government, but probably to those who follow them. In order to asset-strip, the Government have decided that if there is not quite enough in the pot, they might as well swipe the whole pot. Can the Minister tell us what he estimates the long-term annual pensions liability to the taxpayer to be? Will Royal Mail's pensions liability be included in the Government's borrowing figures? What exactly will happen to the £22 billion that is currently in the pension fund? Will the Minister keep the fund intact and top it up, or not? Has he been assured that such action would comply with European Union state aid rules? The other issue is the unions. Royal Mail workers are already planning strikes. What does the Minister expect will be their reaction to today's proposals? We believe that any restructured ownership package must include the full involvement and incentivisation of the staff. What will the pension terms and conditions be for future joiners and for agency workers? Thousands of post offices have already closed; large-scale sorting office closures would be a further blow. What is the Minister's estimate of future job losses, and what is his assessment of the effect of a reconstituted Royal Mail on the income of post office branches? Proposals for the serious reform of Royal Mail are welcome. Private capital to fund improvements in its services is welcome. We welcome, too, Mr. Hooper's focus on preserving the universal service obligation, and the proposed amalgamation of Postcomm and Ofcom into a sensible, tidied-up single structure. But after a decade of missed opportunities, the Government's last-ditch attempt to dangle the prospect of part-privatisation must not distract us from the real story: a bit of Enron accounting that will impose a huge bill on every family in the country for generations to come. The Government are taking the funds that would have paid most of the pensions, and placing a new obligation on future generations to pay the bills that those funds would have covered. Yet again, the Government are stealing everyone's tomorrow for their today. For future generations, the bill is in the post—and it has the Prime Minister's stamp all over it.