Sharon Hodgson MP

Washington & Gateshead South Constituency

Postal Services Bill debate 27.10.10

Sharon took the opportunity to have her say on the planned privatisation of Royal Mail provided for within the Postal Services Bill.


Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): Reform of the UK's postal services was in the manifesto of both the Conservative party and the Liberal Democrats, so it should come as no surprise to anyone in the Chamber that we are considering this Bill so early into the coalition's temporary tenure on the Treasury Benches. What will be a surprise to voters is that, rather than merely allowing for an injection of private investment, the Bill paves the way for a complete sell-off of that vital public service.

That goes way beyond what the Liberal Democrats were elected on; they proposed selling 49% to private investors, which is too high for my personal tastes, but at least not a dominant stake.

I have had a look through the Tory manifesto, which is imaginatively named "Invitation to Join the Government of Britain". I think that the public were led to believe that that was an invitation to them, but as it turned out it was just to a dozen or so Liberal Democrats.

From glancing through that fascinating read, it appears that "the post" got lost in it. I see references to Ministers taking posts, to first past the post, and even to the "Post-Bureaucratic Age", whatever that is. What I do not see is a commitment to postal services, or a pledge to allow the complete sell-off of Royal Mail.

Indeed, the majority of voters for both branches of the current Conservative party on the Government Benches do not support the sell-off of Royal Mail. As both parties have already shown, however, pre-election promises and pledges are not worth the paper they are written on. Therefore, I am sure that their electorates will be getting used to being treated with contempt.

As the now Business Secretary once said about the last Labour Government's vital bail-out of the financial sector, this proposal looks like the Government are intending to privatise the profits of a public business and nationalise the losses. I know that many of his colleagues in the yellow branch of the Conservative Party agree with me on that.

I am also concerned that once the Royal Mail is privatised it will be another institution that is deemed too big to fail. In the event of a potential investor running out of cash in what remains a fairly unstable worldwide economy, will the Government be forced to step back in and assume control of Royal Mail, thus soaking up a second tranche of liabilities? Of course, I am not saying that the Royal Mail should ever be allowed to fail, but the Government can guarantee that that never becomes an issue only by ensuring that a significant majority stake remains in public ownership.

On the separation of Royal Mail and the Post Office, there is no international precedent for separating a national main mail operator from its retail arm. Therefore, the Government are in effect taking stab in the dark - the latest in what looks like a long line of gambles with the future of our country.

Clause 33 gives Ofcom the power to review the universal service obligation. In the event of complete privatisation, the large private company or consortium of companies would undoubtedly have a slick and well-funded lobbying operation, which they could deploy to press Ofcom to change the terms of the USO, potentially resulting in the loss of a delivery day.

Jim Shannon: Does the hon. Lady agree that our current six-day service, with the delivery tomorrow of first-class post that is posted today, might change under the new regime, meaning that on a cold, wet, windy day people in Kilmood, Cloughey or Buckna would not get their delivery?

Mrs Hodgson: I do agree. A lot of things that we now take for granted would be under threat, including that.

Several members of the new Government were fairly open prior to the election about their contempt for Ofcom. It is not for me to speculate as to why that might be, but it appeared to coincide with the acquisition by the Tories of a certain powerful new patron who shares that contempt. At any rate, the chances of No. 10 backing Ofcom on maintaining the six-day delivery week, or of even imploring Ofcom to maintain it, seem fairly slim. Can the Minister today give a guarantee to the House that Ofcom will not be leant on from any quarter-or, better still, will he undertake to remove the flexibility entirely at a later stage of the Bill's proceedings?

I realise that many other Members wish to speak, so I will limit the length of my remarks. The majority of Members recognise that reform of postal services is needed to secure the long-term future of Royal Mail and to maintain the universal service obligation, but the Government have no mandate to introduce the Bill as currently drafted. Allowing the sell-off of Royal Mail is not wanted by my constituents and nor is it wanted by many Members on both sides of the House or the wider public. It is certainly not wanted by the employees, even with the promise of bunging them a few shares as a sweetener.

The only people who do want it are the potential investors and their friends on the Treasury Bench. The interests of this narrow constituency do not justify the Government's taking an ideological sledgehammer to a nut that does not necessarily need to be cracked.

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