Wednesday, March 18, 2009

Post Office and Royal Mail: why Liberal Democrats will oppose government proposals

John Thurso, Liberal Democrat spokesman, has written to us to say that the party in Westminster will oppose the government's proposals to sell off part of Royal Mail. He says: "Our position on the Government's Bill is clear. As drafted the legislation would not secure a sustainable and competitive future either for the Royal Mail or the Post Office network. The Liberal Democrats will therefore be opposing it."


He goes on: "We have judged the Government's Bill against five tests –

1) Does it guarantee the Post Office’s future as a separate, public sector, public service organisation?

2) Does it deliver the substantial investment and plan which the post office network desperately needs to give it a sustainable future?

3) Does it guarantee a full six day a week Universal Service Obligation (USO) throughout the UK?

4) Does it ensure a competitive future for Royal Mail and not leave the company at a disadvantage to its rivals?

5) Does it provide for a fair ownership structure which properly reflects the interests of all stakeholders?

Additionally any proposals must be fair to Royal Mail employees on pay, conditions and pensions.


The Government's Bill fails to meet these tests.


In particular the proposals fail to deliver the investment our post offices need (test 2), fail to deliver on ensuring Royal Mail’s competitive future (test 4) and fail to deliver on the company’s ownership structure (test 5). We will therefore oppose the legislation as it stands.


It is important to be clear that we do recognise the need for reform of Royal Mail and the Post Office. Indeed we have recognised this for a long time. That’s why, three years ago, we developed a comprehensive policy to secure the future of both organisations by:

  • Separating the Post Office network from Royal Mail as an independent publicly owned organisation, with its own board of directors, an investment plan for the future, and significant investment to undertake those plans.
  • Giving post offices the opportunity to develop new business through the “postbank” concept and a prime role in delivering to citizens on behalf of government.
  • Placing the USO on a statutory basis six days a week throughout the UK.
  • Placing Royal Mail into shared ownership, with a majority of shares divided equally between the Government and a Trust for Royal Mail staff, and a minority of shares available for sale (with all revenue going into the post office investment fund).
  • Giving the regulator the power to place a levy on other operators who do not undertake the USO to pay towards its cost.

This is our vision for the Post Office and the Royal Mail. It was reaffirmed in a motion passed at Harrogate last weekend.


The Government have adopted some elements of our proposals (for example, placing the USO on a statutory basis), but overall their package falls well short of what is required.


As we always do, we will work constructively to improve the Government's Bill during its passage through Parliament. But given the Government's response to date I regretfully think it unlikely that we will be able to make any great progress in this.


So we expect to be voting against the Government's Bill when it comes to the House of Commons."


And, of course, we will join Liberal Democrats across Britain as we continue to highlight the dismal record of both Labour and Conservative governments who have closed thousands of post offices, and promote our plan for a reinvigorated post office network, delivering new services and opening new branches.

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