Sharon Hodgson MP

Working hard for Washington and Sunderland West.

Royal Mail debate 25.06.13

Sharon spoke in a a Westminster Hall debate on the planned privatisation of Royal Mail, called by Katy Clark MP.


Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): I start by declaring an interest: I am proud to say that I am a member of the Communication Workers Union, and I am also a member of the Communication Workers Union all-party parliamentary group. I congratulate my hon. Friend the Member for North Ayrshire and Arran (Katy Clark), who chairs that group, on securing this timely and important debate and on her passionate opening speech.

Of course, this debate is timely in that it closely follows the result of the ballot held last week. The result should embarrass the Government, as 96% of postal staff rejected their plans, despite the cash bribes that Ministers said postal staff would receive. That is a reminder to the Government that principles cannot be privatised, which I know is not something many Tory MPs understand. For them, privatisation is a panacea to every problem, whether or not the problem is even genuine. I say that because this debate strikes more than a passing resemblance to the debate on the privatisation of the east coast main line, with which I will draw some parallels to make my points even stronger.

Just as with the east coast main line, the Government want to privatise a key national asset against the wishes of the vast majority of stakeholders, and just as with the east coast main line, the desire to privatise clearly owes more to dogma than to the bottom line. The east coast main line has flourished under public control since the collapse of the private operator and has generated hundreds of millions of pounds in returns to the Treasury while requiring little subsidy and ploughing tens of millions of pounds from the remaining profits into service improvements. Similarly, last month we saw that Royal Mail profits are also showing hefty improvements —up to £324 million—as a result of modernisation and the increasingly buoyant internet sales market. Royal Mail has made a total of more than £0.5 billion over the past two financial years.

The east coast main line and Royal Mail are not failing monoliths or drains on public resources; they are valued services that can and should provide an ongoing contribution to the public purse. Yes, we should always look for them to be better, but private does not necessarily mean better and in many cases may well mean worse. In both cases, the fear is that the Government are opting for a short-term, one-off cash boost ahead of the election, rather than retaining assets that can and should generate ongoing returns to the public purse for years and decades to come. I am sure the Minister will say that that is not the case. Why, then, do the Government plan to pursue the sale of shares in Royal Mail during this financial year, while markets are still quite shaky, rather than waiting until the time is right, to ensure that the best value can be achieved for taxpayers? If Royal Mail is sold off in the next few months, what guarantees do we have that that would represent a good deal for the country? I know there is a difference between rail franchising and a flotation, but what guarantees will we have that the taxpayer will not be called on to foot the bill for private failure, if it comes to that, as happened with the east coast line?

It should not be forgotten that, in pressing ahead, Ministers are not only forgoing the decades of returns that could be realised, but undermining the job security of more than 100,000 postal workers. They are also putting at risk the future of a service that millions of people rely on, despite having no electoral mandate to do so. As always, a Tory Government are putting private profits before people.

My constituents want their Royal Mail to continue to represent their monarch, not to operate in the interests of overseas royal families as part of their investment portfolios. They also want their Royal Mail’s directors to concentrate on improving services, not the bank balances of shareholders, which they would have a duty to do. Finally, they want their Royal Mail to concentrate on maintaining local delivery offices and on keeping services affordable because of the social benefit they bring, not on stripping assets to satisfy the demands of institutional investors. I believe that the Minister’s constituents also want that and that he does too, if his infamous letter to his constituents represents his personal view.

The legislation may be on the statute book, but that does not mean that we have to rush into using it; I would rather that we did not use it at all. Let us at least wait until we can be sure that using it will bring real benefits to Royal Mail and the country as a whole.

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