Royal Mail is a beloved national institution, vital for our communities, for small and large businesses, and for our economy as a whole. Its future, and the future of the Universal Service Obligation (USO), is important to all of us.
The USO means that Royal Mail is the designated provider of the universal postal service in the UK and sets out that the company must provide a six-day-a-week, one price goes anywhere postal service to the 32 million UK addresses. This obligation is overseen and monitored by Ofcom.
In November 2022, Royal Mail wrote to ministers, not for the first time, setting out its arguments for reducing the postal service to five days a week, despite ministers previously confirming they did not want this to happen.
For many in rural communities, particularly the elderly, the six-day-a-week service is relied on, and our posties are a lifeline. Nowhere was that more evident than during the pandemic when they were sometimes the only daily contact those living alone had.
I worked for the Royal Mail for 25 years before being elected to parliament. It was a huge part of my life. I joined the CWU’s predecessor union the UCW union on my first day in the job and eventually became the Unite the union representative. As such I was involved in countless negotiations and meetings with the many CEOs I saw come and go (all with millions of pounds in pay-outs and pockets bulging with shares) on pensions, pay, terms and conditions and working practices.
After so many years of service I was proud therefore, though certainly not pleased, to stand up in Westminster Hall yesterday to lead my debate on the future of the Royal Mail and to defend the USO and Royal Mail’s loyal workforce.
I repeated my demand for an investigation into the gross mismanagement of Royal Mail and that ministers take action to secure the future of this vital service – ensuring that the USO is retained as it is.
Well-managed, Royal Mail can have a vibrant future. But it is not well-managed. In 2021 it made record-breaking profits, taking £758 million in profit – giving £567 Million payouts to shareholders. Yet weeks later, Royal Mail announced significant losses, alleging they were losing over £1m per day.
They are, quite simply, seeking to asset-strip our postal services and turn themselves into a gig economy style parcel courier – something the government should make clear is unacceptable, which would certainly help to solve the current industrial dispute with the CWU.
This is gross mismanagement by Simon Thompson – a CEO with no experience of logistics who, instead of negotiating with trade unions and planning for the future of Royal Mail – appears hell bent on inflaming industrial relations and destroying the USO in the process. He is even threatening workers with the sack for taking legitimate action.
I asked the minister, Kevin Hollinrake, to condemn the top team’s inflammatory actions. He did not.
Ahead of my debate, I met with representatives from professional publishing agencies, business, industry, trade unions and others who are all keen to protect the future of Royal Mail. I have also met with Royal Mail.
The Professional Publishers’ Association told me of the impact of reducing deliveries to five days will have on members’ business models, the closure of UK print editions and potential multi-million pound losses due to cancelled subscriptions and reduced advertising revenues.
Royal Mail often cites the fall in letter volumes since privatisation and changing methods of communication – but with the huge increase in stamp prices I believe the USO is still profitable.
Yesterday, responding to my questions, the minister confirmed the government’s commitment to retaining the six-day service and that the USO remains at the heart of the postal service. This is reassuring to a point – but the minister said this was their current position – so we need to remain vigilant. But, as I said in my reply to him, there are so many areas in which Royal Mail senior management is failing, deliberately running down the service to put pressure on the government to change its mind.
It was good to hear every contribution in the debate talk about the importance of saving the USO – from conservative MPs in rural constituencies, SNP MPs talking about the importance of the USO in Scotland, and many of my Labour colleagues speaking up for Royal Mail.
The problem is that Royal Mail management aren’t listening and are driving down the service to put pressure on the government to change its mind. Ministers must now intervene to ensure the six-day-a-week obligation remains viable and to ensure OFCOM is regulating Royal Mail effectively.