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Postal Services Bill

To most people in this country, the Royal Mail and the Post Office are synonymous. To them, the matching colours of the Royal Mail vans and the oval sign indicating the presence of a post office are symbolic of an inextricable link between the two. They are the two arms of one and the same service. The post office is the collection or access point—the place where people take the parcel that they want to post or the letter that they want to register—and the Royal Mail van that does the country rounds, or the postman or woman wearing the badge with the red and yellow insignia on it, provides the delivery service. To most people, it is unthinkable that the two should be separated, and indeed Moya Greene, the chief executive of Royal Mail, recognises that historical link and has uttered warm words about a privatised Royal Mail continuing to use the Post Office to provide the access counters for its services. However, fine words are not enough. In the tough world of business, in which a profit-hungry, privatised Royal Mail will be looking to drive the hardest bargain possible, neither tradition nor public service is likely to be the foremost consideration. They are likely to be subservient to the profit motive. One may well think that the motive of profit would also lead to costs being driven down, which would be beneficial to the consumer. However, we all know that cost-effectiveness can mean that services become concentrated in the big centres with high turnovers. Services such as shops or post offices that serve scattered rural communities, or less well-off urban areas where spending levels are low, find it difficult to make ends meet, and that can lead to shop owners or sub-postmasters shutting up shop with little to attract new entrants. The consumer is therefore left with fewer outlets and less choice. Very often, those who are not car owners miss out most. They can no longer look forward to a little walk and a chat in the local shop. We have all seen it happen—the big supermarket arrives in an area and surrounding businesses are put out of business. Labour's belief is that a viable, sustainable post office network is a critical part of the social infrastructure of many communities. That belief led us to develop the access criteria for post offices and to set aside the £1.5 million annual subsidy to maintain the current network of some 11,900 post offices. I am pleased to note that the important social role of post offices was recognised in the Government's recent document accompanying the announcement of the continuation of that subsidy. We know that Royal Mail business accounts for more than a third of the post office network's revenue—some £343 million. One third of sub-postmasters' pay, some £240 million, is also generated from the sale of Royal Mail products and services. Clearly, the loss of one third of the Post Office's revenue would have catastrophic effects. That calls into question the logic of allocating £1.34 billion of taxpayers' money to subsidising and refurbishing post offices, when we could find the business stream that guarantees them a third of their business being taken away. There has been no guarantee that it will stay. Where is the logic in putting taxpayers' money into the Post Office while doing nothing to secure a third of its revenue? Using taxpayers' money to refurbish post offices while doing nothing to secure Royal Mail business is like respraying a car before pushing it over the cliff. The Minister has tried to tell us that he cannot do anything about securing an inter-business agreement between a privatised Royal Mail and the Post Office. He is standing back, wringing his hands and saying, ““Oh, I'm so terribly sorry, there's nothing I can do.”” It sounds very much like Pontius Pilate. What advice has he taken? What options has he explored? Does he expect that a privatised Royal Mail would honour the current inter-business agreement? Depending on the time scale of his proposed sell-off of the Royal Mail, that could mean honouring just the last couple of years of the existing agreement.