Royal Mail (Hansard, 7 June 2004)

§ Lord Davies of Oldham
My Lords, Royal Mail is currently undertaking a complete restructure of the business with the full backing of the Government. This is a huge undertaking for the company. I understand that, for the most part, the change has gone reasonably smoothly and is now working well. There have been some problems in certain areas and Royal Mail has apologised for the fall in service. Royal Mail has drawn up detailed plans to tackle these problems and DTI Ministers have Allan Leighton's personal assurance that these will be implemented vigorously.

§ Baroness Oppenheim-Barnes
My Lords, is the Minister aware that he has been misinformed? Nothing is going smoothly and it has not been going smoothly for many months. The Royal Mail is a national disgrace. I do not accept the figures that have been given. Is it not fraudulent for Royal Mail to charge people for a first-class stamp when it knows for certain that in many cases there is no hope of completing a first-class delivery?

§ Lord Davies of Oldham
My Lords, I think that the noble Baroness should be a little reserved about dismissing the figures. They are externally verified. 2 The position is that the Post Office has rightly identified that its target was for 93 per cent of first-class mail to be delivered the next day and it hit only 90 per cent. It has apologised for falling short of that target. In other respects, the process of major restructuring in any company as large as this is bound to cause some difficulties in the short term.

§ Lord Clarke of Hampstead
My Lords, I declare an interest as a former postman with more than 50 years' experience of the Post Office. Is the Minister aware that it is the dedicated workforce, especially the regular delivery officers, who are bearing the brunt of the criticism—which is justified in many cases—and that they receive insults on the doorstep because of the deteriorating service? Does he agree that the increasing use of untrained, straight-from-the-agency staff to deliver people's important mail is causing widespread delay and misdeliveries? As the Government wholly own the Post Office, should they not be using their influence to halt the obscenity of paying senior managers vast bonuses for their failures?

§ Lord Davies of Oldham
My Lords, I agree with my noble friend that the vast majority of full-time postmen discharge their responsibility successfully and conscientiously. As he has indicated, there have been problems with regard to the employment of casual labour, which has been necessary because it is extremely difficult to recruit postmen in certain parts of the country. On the more general issue of pay and bonuses, the senior figures in the Post Office forsook their bonuses, except in the area of the financial target. It is in the area of the financial target that they have been successful. In all other areas, they did not receive bonuses.

§ Lord Razzall
My Lords, has the Minister read the report by his noble friend Lord Sawyer, which was circulated in the past 24 hours, on the question of labour relations within the Post Office? If he has read it, would he not agree that his somewhat optimistic statement to 3 the noble Baroness regarding improvements in the Post Office, particularly in the Royal Mail, is perhaps undeserved?

§ Lord Davies of Oldham
My Lords, in a service industry like the Royal Mail, the relations between staff in the organisation are crucial. Last year was a bad year and, without any doubt at all, it contributed to the significant failure of the Post Office to hit certain targets. There is clear room for improvement. Assurances have been given to the Government that it is the area on which the management intend to put the highest priority.

§ Lord Wright of Richmond
My Lords, I recall reading in the press about two months ago that Royal Mail had decided to revert to the excellent practice of putting the time of the last post into the slot on post boxes. Does the Minister know when this will start?

§ Lord Davies of Oldham
My Lords, I had voluminous briefing for this Question but not a single reference to that particular point. The noble Lord has clearly indicated something that the Post Office ought to consider and we will make sure that his comments will be referred to it.

§ Lord Dubs
My Lords, will my noble friend confirm that even if there are difficulties with mail deliveries in some parts of the country—London may be an example—there are other parts of the country where the service is excellent; for example, in Cumbria? It is much to the dismay of postal workers in those parts of the country that they are being tarnished by the kind of allegations that have been made from the Benches opposite. There continues to be an excellent service in those parts of the north of England with which I am familiar.

§ Lord Davies of Oldham
My Lords, my noble friend is right that across the vast range of the country postmen are fulfilling their duties with the conscientiousness for which we have always respected them. There are one or two areas where there have been very considerable difficulties. At least one of those areas is one where there is a heavy movement of mail; namely; London. Last year, that contributed to the failure of certain aspects of the postal service.

§ Lord Inglewood
My Lords, having heard the Minister's fulsome confidence in the future performance of the Post Office, can he assure the House that the cheque in the post will come more quickly than it has in the past?

§ Lord Davies of Oldham
My Lords, the noble Lord is one of those fortunate beings who receives cheques in the post. Many of us envy him.

Lord Berkeley
My Lords, although it is good that my noble friend the Minister says that Post Office directors forwent bonuses last year in relation to delivery, they still received bonuses for financial performance. Financial 4 performance is clearly important, but with delivery performance as appalling as it still is in some parts of the country, surely they should not receive any bonuses at all.

§ Lord Davies of Oldham
My Lords, I think the chairman of the Post Office is all too well aware of my noble friend's sentiment in this respect; he made it clear that he was not prepared to accept a bonus. However, there would be no point in having targets and bonuses attached to targets if the bonuses were not paid when the target was hit. As I indicated earlier, the financial target was hit. That was the area in which the bonus was paid.

§ Baroness Miller of Hendon
My Lords, following the noble Lord's first—very polite, but perhaps somewhat complacent—Answer, and as he spoke a little later about London, is he aware that in the postal district where my office is located—in London W1, where there are loads of solicitors, accountants and professional people—the Royal Mail's target is to deliver the mail between 11 a.m. and 2 p.m., and that that is all? Does the Minister really think that delivering on such unrealistically low targets is what could be called a proper delivery service?

§ Lord Davies of Oldham
My Lords, there has been widespread recognition of the fact that the Royal Mail has moved to one delivery. That made financial sense because 20 per cent of its resources were being devoted to a delivery of only 4 per cent of the mail. The noble Baroness has identified the fact that the service needs to be improved—the chairman made it absolutely clear in his meeting with Ministers that he regards that as the top priority—and she is quite right. In parts of the London area the service has not been satisfactory and the Post Office recognises that fact.