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Postal Services Bill [HL]

My Lords, I support the Bill quite enthusiastically. I spoke on the topic seven years ago in a debate initiated by the noble Baroness, Lady O’Cathain, when the company was called Consignia and Postcomm had just put forward its first proposals for liberalising the trade. Similar sorts of statements were made at that time: "Yes, it was bad but it will get better"; "Just have patience"; "We should not change a 350 year-old industry"; "The postman is a noble person"—no doubt—"who works very hard". All that is entirely accepted. Such change as has happened did so because of the introduction of competition; without competition, it would not have happened. Although change has happened, it is by no means enough. Incidentally, I am sorry that, as bad as "Consignia" was, the company is called "Royal Mail"; it just brings royalty into disrepute, as my noble friend Lord Whitty said. People have criticised the Hooper report quite a bit, in a variety of aspects. They have said, "You know, the losses were in the past. Suddenly Royal Mail has made a profit". Page 59 of the Hooper report shows a projection of profits for the next five years. Except for this year, they are all in negative territory. That is not a comparison with foreign post offices. Of course, whenever you make comparisons, you encounter people who believe that foreigners know nothing about our business, that we are the only people who can do it and that all foreigners are irrelevant. However, as of now, the prediction is that Royal Mail will go into negative territory every subsequent year because, as people have said, the letters business is collapsing. Last Christmas, I received an all-singing, all-dancing Christmas card online, something that Royal Mail could not deliver because such cards are not available for sale. If Christmas cards are the bulk of the business, people will very soon be sending Christmas cards online. Soon, they will not write many letters. As the example of British Steel shows, if you want to manage an industry in decline, privatise it. That will manage the decline much better than keeping in the public domain. I know that this is not what all people say. I was persuaded by what my noble friend Lord O’Neill said. We are very sentimental in tolerating a low-wage industry. It is a low-wage industry because it is unmechanised—that is a universal truth in economics. On page 52 of the Hooper report we have the comparative share of labour costs across different countries. The higher the labour cost, the lower the productivity of workers. It is a universal law; I can say that because I have taught economics for 45 years. The reason is that low wages result from a lack of courage to modernise, automate and use the latest equipment. Of course, the worker fears that if machinery is introduced, he will lose out. He therefore resists and consigns himself to a low-wage industry. You have to work hard in an unmechanised industry. It is a job of drudgery. We are now asking ourselves whether to keep the postal workers in this glorious, low-paid, unmechanised job. Obviously, like St Augustine, we want to improve, but not yet. We basically go on praying that life will improve. Frankly, it is not enough to say, as my noble friend Lord Whitty did, that we can get capital here, and management. That is not good enough. I doubt that anybody will give capital to the Royal Mail in the current market conditions, and any they did would be at an extremely heavy price anyway. Even with that, however, new management is needed, embodied with the incoming capital. Whether it is TNT or somebody else, I do not much mind. It is clear that internal, endogenous improvement in the Royal Mail, such as has taken place, has not been enough. Unless we recognise that simple fact, we will further consign the industry to backwardness. A number of noble Lords have shown that this is a story of failure of Governments of that party and this party, trade unions and management. Yet we still believe that this circus should somehow go on and on, because we are sentimentally attached to what we have. We are a conservative country. We do not like change; we fear change. Despite that, every time that we have changed in the past 20 years, things have improved. Does anybody remember what the telephone service was like when you had to apply on a form for a telephone? You were not treated like a customer; of course not. You were treated like a citizen: very badly. Does anybody remember British Airways? Does anybody remember how bad the steel industry was? Did we not celebrate 25 years of the great, sentimental fight for the coal industry, which has now shut down? Why? Because the coal industry was then fighting not for worker ownership, but for the right of miners’ children to have miners’ jobs, thank you very much. That has gone, and the economy is better for it. Who remembers when Ravenscraig was going to be shut down? The Scottish economy was going to come to a halt. I remember speaking at that time, saying "Let Ravenscraig go". No wonder my career has not advanced. We must go firmly down this path without reservation, open up to competition and ask for bids from anybody, up to 30, 35 or 45 per cent; I do not care. We must get this business on the road again, so that whoever is employed in the post office in the future has a wage that is comparable to some better industries in the country, and the consumer gets a better service than he or she now does. The consumer does not get a very good service. Small businesses lose a lot of money from the inefficiency of the postal services. I have not looked at it lately, but when I last spoke about it, only 92 per cent of letters were delivered; I do not know where the other 8 per cent went. There are few 350 year-old things worth keeping on. We have an opportunity now. Do not say, "Why now? Why can’t we delay?" We have delayed for 20 years. We have had 20 years of waiting to improve the postal services in this country. It is about time we grasped the nettle. I congratulate my noble friend the Secretary of State on at last having had the courage to do so, and to fight the good fight.