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Royal Mail

No, I must make some progress. Royal Mail has made some progress in recent years. Its performance in delivering first-class post by the following day has improved and some investment in new machinery has been made. However, it is still less automated than many comparable services. There is still a great deal to do, to secure not only automation but the delivery of new products. One example used in the Hooper report is walk sequencing—the last stage of post sorting before the delivery round. That is done by hand in the UK, while some competitors do 85 per cent. of that work by machine. Much has been made in recent weeks of the finance needed to make progress on the issue. I want to make two points about that. First, the £1.2 billion that the Government gave Royal Mail two years ago is a commercial loan, which much be repaid to the Government. Secondly, that form of finance is neither fast nor flexible. Even after lengthy negotiations between the company and the Government, two years on the European Commission is still deliberating about whether the financing is allowable under state aid provision. Royal Mail must not only complete, install and use the new machinery that it needs, but develop new products. The idea that the company's problems will be over if we lift the pensions deficit is wrong. The company needs ongoing capital and expertise to combine the use of mail with other technologies. We have seen too little of that in the UK. Partnership offers the opportunity not only to inject new capital into the business but to bring in expertise and the confidence to make the changes that the company has so far not made far enough or fast enough.