Royal Mail and the Post Office

I congratulate the hon. Member for Argyll and Bute (Mr. Reid) on securing this timely and important debate, and on the thorough and thoughtful way in which he introduced it. He took us through some of the areas where we have seen a general decline in the post office service. He talked about the ending of the second delivery and the increasing cost of postage, although the hon. Member for Dumfries and Galloway (Mr. Brown) was right to point out that in most other European countries, the postal rate is two to three times what it is in the UK. The hon. Member for Argyll and Bute talked about the confusing approach that is used to show that the post has been delivered on the next day. We need to take more account of that. He could have added the end of the daily collections, the often confusing pricing system, which means that people do not understand the correct postage for their letters, and the decimation of the postbus service, which has been withdrawn in many parts of the country. The hon. Gentleman was treading on dangerous ground when he criticised the BBC for seeking to save £100 million of licence payers' money. If people had to go through post offices, another £3 or £4 would be added to everyone's licence fee to pay the extra £100 million that would be required. It is right that there should be open competition. The Post Office is in a serious situation, but it is a mess of the Government's making. After all, the Government set the framework for the closure of post offices. The financial rules and level of subsidy were set by the Government. The access criteria, which were about geographical location rather than economic viability, were set by the Government. The fact that the consultation period is only half the time recommended by the Cabinet Office was determined by the Government. It is intriguing that post office closures had to be suspended in the run-up to the local elections because of Cabinet Office rules, yet the same rules do not prevent the Government from announcing £2.7 billion of public funding for tax cuts this week, just before a by-election. Furthermore, the rules on the closure of post offices must have been cleared by the Government. Post offices that are closing have been told that they may not offer a lottery service and they may not offer a PayPoint service, because the Post Office wants to encourage migration. It is one thing for the Post Office to determine where people may buy their stamps, but it should not be determining where people can buy bread and milk as well. As was said by other hon. Members, particularly the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), when we lose a post office, we often lose a shop and services beyond that as well, which does tremendous damage to local communities. The sadness is that the Government ignored a formula that could have saved post offices. In addition to the subsidy, which is so important and which we support, they should have been finding ways to bring new business into the post office network before they tried to find out how many post offices they could get away with closing. There has been discussion this afternoon about how we could bring in business by allowing the Post Office to work with other carriers. It is environmentally crazy to have vans driving forwards and backwards past the local post office every day unable to deliver packages to local houses because people happen to be out. It would make much more sense to use the post office as a hub where people can access a range of local carrier services. Other financial services could be considered. Sub-postmasters themselves are calling for that. We never meet a sub-postmaster who says, ““I want more subsidy; I want to depend on subsidy.”” They always tell us that they want to depend on business. We should be opening up opportunities for them to depend on business, and ensuring that post offices become a hub where people can access local and central Government services. Much more business could be done through the post office network, which would enable more post offices to survive on business, rather than having to rely on subsidy and seeing their numbers cut as they have been. Investment should have been made to enable post offices to compete on a level playing field. The hon. Member for Dumfries and Galloway talked about the number of people who renew their car tax online, but if we go online, we just type in our registration and it is immediately known whether our car is insured and has an MOT certificate if it requires one. If we renew through the post office, it does not have access to that information through its computer, so we have to take with us the insurance certificate, the MOT certificate and all the bits and pieces that make the process less convenient. Even when we want to do things to support the local post office, we find that the system is skewed against us. More generally, it is clear that the challenge facing Royal Mail is formidable. Some of the most lucrative parts of the business have been gradually chipped away. The issue is not whether it was right to liberalise, but that liberalisation works only if everyone liberalises at once. The problem we face is that we have done it ahead of most other countries in Europe. If it had happened in other countries at the same time, Royal Mail would have been able to explore opportunities elsewhere. The Hooper report has been cited. It states:"““There is now a substantial threat to Royal Mail's financial stability and, therefore, the universal service. We have come to the ""conclusion, based on evidence submitted so far, that the status quo is not tenable. It will not deliver our shared vision for the postal sector.””" From what Mr. Leighton and Mr. Crozier say, it is clear, too, that more money will be needed. It is wrong to blame them for what has gone wrong. They are trying to run a business with their arms tied behind their backs by the Government. Adam Crozier said:"““Clearly, the business needs more cash to invest.””" Allan Leighton said:"““We have got to know what cash we will have coming in.””" We need to know from the Minister what discussions he is having with them, how much money he proposes to put into the Post Office and Royal Mail and how he plans to do that. What will they offer in return? Just a year ago, a £3.7 billion rescue package was put together for the Post Office, but now we know that it was not adequate to secure the survival of Royal Mail and the all-important universal service obligation.