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Royal Mail

I am grateful for the opportunity to discuss the Hooper report. When the statement was made, I said that it was important to debate the matter fully. Indeed, if ever an issue deserved a pre-legislative scrutiny process, surely this is it. Richard Hooper and his team have done an excellent job with the report, which is thoughtful and thorough. Whatever one's views of some of the individual points, the general thrust and conclusions cannot be ignored. Let me begin, therefore, by looking at the principal points, which are helpfully set out in the ““Headlines”” section of the report. Let me deal first with the universal service obligation. It is fairly hard to conceive of a report saying that the USO should be disposed of, but there were options for diluting it. I am extremely glad that Hooper rejected all those options. Not only does the Hooper report recommend the maintenance of a six-day-a-week USO to all addresses in the United Kingdom—I would qualify ““all addresses”” as ““the vast majority of addresses””; a Mr. John Ridgeway on the Ardmore peninsula is still waiting for the resumption of his deliveries—but it points out that the USO is very much part of the economic and social glue of our country. The USO must remain a six-day obligation, its coverage must be as near as possible to 100 per cent. and, as has been pointed out, it needs to be affordable. The report draws the clear conclusion that to maintain that kind of USO is not possible under the Royal Mail's current arrangements and in the face of competition from other media, particularly text messaging and e-mail. The second point is the need to deal with the pensions deficit, which continues to balloon, having been around £3.4 billion in March 2006. Hooper reckoned that it was around £5.9 billion, and given the movements of the markets, it has probably increased substantially since then. Both the deficit and the deficit payment are a serious drag on the company. Of the 13.5 per cent. gap that Hooper identified between Royal Mail's operating profit and the operating profit of the continental companies that he believed to be most efficient, 4.3 per cent. was made up by the catch-up deficit payment. Thirdly, the report emphasises the difference between postal services—that is, the Royal Mail—and post offices, and recommends that post offices should remain wholly in public ownership. That is a point with which I agree entirely. Hooper does not go any further on post offices, as that was not in his remit, but the report must be an opportunity to put the post offices on a sound footing. I shall return to that point in a moment. The fourth point that Hooper made relates to regulation. It is absolutely right that regulation should be dealt with, and I think that Ofcom is the proper body for that. Fifthly, the report makes it perfectly clear—virtually everyone agrees with this—that the status quo is not an option. Royal Mail needs to change and modernise, and it needs to face external competition from outwith mail services. It needs, in Hooper's words, to transform and diversify. The conclusion reached is that achieving that requires introduction of expertise through a partnership management agreement with one of the private companies, which will bring commercial confidence, instil better practices and create the ability to acquire and access private capital. In that regard, the Government have indicated that they favour a sale of a minority stake in Royal Mail to a private partner. That raises some questions that need clear consideration. I shall come to those questions in a moment, but let me first touch on the motion before us, which the right hon. and learned Member for Rushcliffe (Mr. Clarke) moved. Broadly speaking, his motion says: ““We agree—bring it on,”” to which I say: how wonderfully retro. What a thorough cast back to Thatcherism—indeed, it is Thatcherism that even Mrs. Thatcher would not have agreed to. It is privatisation of the ““Chuck 'em all out into the cold hard world, the cold waters of competition and commercial reality and the job's done”” kind. Of course, it helps the right hon. and learned Gentleman that the Conservative party is broadly a policy-free zone on the Royal Mail. I could certainly find nothing published on the Conservative website, although admittedly there may be something else, apart from the helpful admission made by his predecessor, the hon. Member for Rutland and Melton (Alan Duncan), that the Conservatives will continue to close post offices, as they did under the previous Administration. It is a shame that the right hon. and learned Gentleman chose to paint such an uninspiring and rather passé picture. It is certainly not one that I would ask my colleagues to follow.