Postal Services Bill

I am grateful, and I am glad that we have a solid platform on which to continue the debate. It is remarkable that not just myself, but not a single Labour member of the CWU parliamentary liaison group, which worked together with the CWU and the Post Office, was asked to participate in the Committee considering this Bill. I might ask the Minister some detailed questions that he could have answered before if I had been granted access to his knowledge and aspirations in Committee. That position will have to be explained by the business managers—not by me, as it has never been explained to me. I wish to focus on amendments 21 and 22. Let me provide some background. The 10-year period in amendment 22 for the universal service provider—currently, the Royal Mail—is welcome, but the phrasing of the provision amounts to a get-out clause. Lords amendment 22, as it says in the explanatory notes,"““would prevent Ofcom from making a procurement determination within 10 years from the day that Part 3 of the Bill comes into force, unless the universal service provider agrees.””" Thus we have a privatised Royal Mail with a universal service obligation; it has all the burdens, which are not going to be shared properly with others in the business. Others have already cherry-picked much of the provision—TNT, to name just one, and many others come through our door, delivered in the last mailbag by Royal Mail employees. As far as I can see, none of the burden is going to be shared with Royal Mail for providing that universal service; it all falls on the universal service provider. By using deductive logic, people can see that the privatisation of the universal service provider, the Royal Mail, should not be continued. We would like Ofcom to look at splitting up the obligation and sharing some of the burden by allowing some other regional post office or mail provider to come in and take on some of it. It is possible that in a privatised scenario, the interests of the Royal Mail—at the moment, the public service provider—will not be the same. As I say, there is a get-out clause. Clause 33(5) will permit the Secretary of State to amend the minimum requirements of the universal service postal provision in clause 30—a mail service for six days a week, provided at an affordable and uniform price throughout the UK. Under clause 33(7), an affirmative resolution is required before the Secretary of State can make amendments, but a coalition Government with a majority can easily achieve that. This is predicated on good will, in a sense. On a more negative view, we see these provisions as being nothing but wallpaper for public consumption, which will not help us to face up to the financial problems of a privatised Royal Mail operating in a privatised environment. In that context, it might not be sustainable. I am concerned when the amendments can be interpreted in two different ways. I have not had the benefit of interrogating the Minister in Committee, of hearing the Committee debates or of participating in the debates in the House of Lords that led to these amendments being brought forward. Lords amendment 21 increases the three-year period in clause 42—which provides for Ofcom to review the extent to which the universal service provider is bearing a financial burden—to five years. If that extension is such a good thing, why is this a Government amendment? Why was it not tabled, here or in the House of Lords, on behalf of the work force, via the Communication Workers Union? What is the reason for the extension? The provision of a universal service is one of the great burdens on Royal Mail. Delivering post in parts of the constituency of the hon. Member for Angus (Mr Weir) or a constituency in Somerset is much more burdensome than delivering it within the square mile of the City of London. The last Government, which allowed commercialisation, were immediately accused of allowing some companies to cherry-pick the deliveries. That is why TNT made so much money: it is much more interested in cities and large conurbations than in the universal service obligation, which covers all the sparse and difficult parts of the country. The capital and work force required by the universal service provider cannot be utilised at its optimum level because of the unevenness of the urban density and geography of the country. Some areas are more profitable than others, but the burden of delivery must still be carried. Clause 43 provides for the regulator to consider mechanisms for a burden-sharing arrangement if Ofcom finds that such a burden exists. I welcome that proposal. Ofcom could take three possible courses. It could review the minimum requirements of the universal service under clause 33, which means downgrading the service. The Minister said earlier that that was not one of the Government's aims. There could be a industry or users' levy, which has been hotly resisted by the privatised cherry-picking companies which have made a killing from the commercialisation of Royal Mail delivery in the past decade. There could be a ““procurement determination””, allowing the universal service provider's obligation to be changed under clause 43. No one knows what course Ofcom will choose, but we do know that if there is to be any logic and justice in a levy across the industry to help with universal service provision, the Lords amendment will not allow it to happen for five years. This is a negative amendment. It leaves Royal Mail with a burden that it cannot shift, cannot share with others, and cannot ask Ofcom to share with others for five rather than three years. Perhaps the Government want that to happen. If that is what they are up to, let them tell us. I know that the extension to five years has been welcomed by those who are currently making a nice killing by cherry-picking certain kinds of mail, but a real problem will face whoever bears the universal service obligation under privatisation. No subsidies will be offered; the provider will have to stand on its own two feet and make a profit. It will have to seek a change. The extension to 10 years proposed in Lords amendment 22 is all right as long as the procurement trigger is not used by the universal service provider, but I think that the two proposals are heading in the same direction. Following privatisation, there will be pressure on the universal service provider—currently Royal Mail—to offload some of its universal service obligation. It could do that by means of a change in the number of deliveries. There have already been some changes: there is now only one delivery per day, and letters are not collected from mail boxes between lunchtime on Saturday and 5 pm on Monday. All those adjustments were made under the pressure of commercialisation, but there will be other pressures. What worries me particularly is the possibility that regions to which a provider does not want to deliver will be offloaded on to another provider. That provider will then go to the Secretary of State or Ofcom and say, ““We cannot make a profit on this.”” My hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) was asking about this point earlier. The provider will say, ““It is not viable, so we want to be able to change the arrangement either by cutting the number of deliveries or pick-ups or by altering the price of the delivery.”” All those options are available under these amendments. It may not be the intention. If it is the intention, the Minister and those who drafted the amendments are being Machiavellian in their approach to the Royal Mail. I do not think they are Machiavellian, however. Frankly, I do not believe they are sufficiently smart; I think they are just blundering along, putting together groups of clauses and amendments that will have unintended consequences. I am worried because the Bill, with these amendments, is deeply flawed. There are even flaws in the amendments that we are welcoming now. We are providing for 10-year terms, but it is still possible to get out of that by going to Ofcom and saying, ““We can't make it. We can't cut the mustard here. We can't make a profit. Either we give up as a universal service provider and sell out the lot, or you let us break up the franchise.”” I think that is what will happen. I have serious reservations, therefore. Also, why does the Minister want to extend the time period for Ofcom to be able to review the situation from three years to five years, under amendment 21? Is it to protect those who at present do not want to pay a levy, or to stop the burden sharing being properly looked at, or is it because he wants to save the minimum requirements of the service order? We are not sure. Will he address those concerns to give me the confidence so that I do not choose to press amendment 21 to a Division?