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Postal Services Bill [HL]

My Lords, I support the Bill. I spent a sizeable number of the past 10 years in the House of Commons chairing the DTI Select Committee. We spent God knows how many hours taking evidence on the various forms of this logistics company. It started as the Post Office; it became Consignia and ended up as the Royal Mail. Always the story was the same. It seemed that there was a problem: it could be the management; it could be the unions; there was never enough money; if there was enough money, it was used for the wrong purpose; if we had to find partners among the international competition, we seemed to arrive too late to buy the good companies and ended up with ones that were perhaps not as good; and we regretted the fact that Royal Mail, or whatever it was called at a particular time, never became an internet service provider or had the kind of specialist delivery services that other companies had. Equally, more pertinent questions could be asked. Why, for example, did it take so long for Royal Mail to get machines capable of sorting A4 envelopes? Obviously, A4 envelopes were not a standard size and therefore should not be considered. The fact that so much of the mail we now receive comes in that format suggests that somehow the management was always behind the curve and that this was a logistics company still run as a government department. Despite the fact that it had been incorporated in the late 1960s, it was very much run at the top by civil servants or by those who had what was largely a Civil Service attitude towards business. Certainly, we had a succession of Secretaries of State and Ministers who, for the 25 minutes they were allowed to look at this operation, came up with a couple of bright ideas but, before they had a chance to articulate them, were moved on somewhere else. Therefore, we did not have the kind of political accountability and investment programmes that we wanted. It was clear that everyone associated with the Post Office believed that it was the finest service in the world, but there was a lack of what I might call disloyalty towards the management. Indeed, my good friend Lord Clarke of Hampstead is the exemplification of that. Somehow, as a trade union officer whose hand should never have been far from the throat of his employers, he seemed to spend most of his time agreeing with them about how the business was run. Even today, an organisation such as the CWU, which has a sad record in industrial relations, never seems to want to question to any great extent the status quo, which has served the industry and the workers extremely poorly over a long period. Today, after pay rises of 36 per cent over the past seven years, we are still talking about a basic rate of £347 a week for men and women who are expected to go out five days a week in all kinds of weather delivering our letters, having spent an unconscionable amount of time doing the boring and needless job of sorting the letters when there is equipment available to do it. I happen to believe that it is not the purpose of the Labour Party or the trade union movement to defend low-paid drudgery and call it the best postal service in the world. If there are means to change the efficiency of a business, it is incumbent on the owners of that business to do what is necessary. If that is to happen, it has to be done against a background of a collapse in the postal service as we know it. We usually talk about improving investment and enhancing business services against a background of increasing demand, yet we know that 8 per cent of the letters business will disappear this year, and that will probably account for in excess of £5 billion worth of revenue. We know that that cannot be afforded by this company, which is beset with problems relating to the pension fund. I do not doubt that in Committee we will have debates on the nature of the pension fund deficit. Certainly, the very helpful document produced by the Library suggests deficits of a frightening order, the simple servicing of which would deny Royal Mail the means of investing in anything. If we had a means of pump-priming the Royal Mail, it is no longer open to us without European scrutiny, the application of state subsidy, regulation and criteria of a kind which make the whole business of borrowing far beyond the easy, neat solution you thought it was. The combination of the decline in the revenue stream represented by letters, the inability to borrow and the size of the pension deficit therefore requires us to take action. That is not action that we could have taken or would have needed to take 10 years ago, or that was even part of the Tory list of ambitions when they were in power without a majority. This has come upon us very quickly. To those who have come down from the mountain of Warwick with the tablets of stone, I say what Keynes is repeatedly quoted as having said: when the facts change our conclusions have to change as well. In the past three years, the facts have changed so dramatically that we need to look at the alternatives. The alternative is not increasing the price of letters and promising we will deliver them more quickly. At the moment, most of the service targets are being met and we are making profits, but nothing like the order required to meet the deficit, investment or whatever. However, it is interesting that we are making profits in the Royal Mail in all four areas. GSL, on the Continent, was regarded as one of the dubious options when it was first acquired; and Parcelforce, which for years was a basket case, was regarded as an exemplar of inefficiency. Now, because of the digital revolution, the opportunities afforded by Amazon-type businesses means that they are getting the lion’s share of the distribution of parcels across the country. To make that fully efficient we need investment. Over the years, I have looked at contractorisation in varying forms. Twenty-five years ago, the Prime Minister and I spent a year of our lives trying to stop the contractorisation of the dockyards. It has now been shown to be a very effective way of running individual businesses, whether dockyards or, I hope, Sellafield. Unfortunately that model does not apply when one is dealing with a multi-centred logistics business which needs a web of support under it. I do not think that is appropriate. Therefore, the point made about the Government by the noble Lord, Lord Neill, is of value. We must discuss that in Committee. It is abundantly clear that we will need not just financial investment but cultural and business investment. The Civil Service culture, which pervades a great deal of the management structures of the Royal Mail, lacks not only money but what the economists used to call entrepreneurial acumen; it lacks the business discipline of the bottom line. My contention is that if we can get the investment which should come from private participation—we do not know the scale or the personalities but there are models and the contractorisation model is not irrelevant—we will see management changing and the replacement of the celebrity-style management that we have had, with big names coming in, being partially successful, picking the low hanging fruit and doing remarkable things as regards efficiencies, to which my colleagues have already referred. Not only do we need money for the first tranche of investment, but we must ensure that we have the management to enable that money to give us far greater resource, liberating the forces within this great business to achieve what has so far been beyond its grasp. If we can do that, we will provide a future not just for the pensioners who deserve it—over the years, they have been badly paid and need some degree of security in their retirement—but also for the young people who will need to come into the business. The business may not remain 100,000 strong, but it will be a major player in this country and the kind of player which, before too long, young people can be pointed towards and told, "This is a business which could be a job for life". That is what we want. It was a job for life for some of our colleagues here and they have a nostalgic affection for it. I think that some of the nostalgia is misplaced and that the affection is somewhat exaggerated, but nevertheless we have an opportunity now to have a British logistics company in public ownership which will be a credit to all who work in it and a credit to us who support it today.