Pat McFadden
MP for Wolverhampton South East · Labour · United Kingdom
“In his review Alan Milburn considered that issue and said that, “the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years.” As I said earlier, 400,000 more people are in work this year than last year, and the number of young people in employment is up since the election.”
“Since our last DWP questions, both Alan Milburn and the Pensions Commission have published their respective interim reports on young people and on the current state of saving for retirement. I look forward to receiving their final reports later in the year.”
“As Alan Milburn pointed out in his recent report, the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years. There are 400,000 more people in work than last year. The number of young people in employment is up by 74,000 since the election.”
“I thank the right hon. Gentleman and send him commiserations for whatever has left him reliant on his crutches today. I am happy to congratulate the businesses he mentioned in his constituency. He raises a serious point: it is important not only to come up with the right policy, but to make it simple for businesses to use.”
“My hon. Friend is right, and I thank Cardiff football club for being a partner. We are supporting nearly 1 million young people and creating up to half a million opportunities for jobs and training.”
“We are making strong progress on expanding youth hubs, with around 130 already in operation across Great Britain. In March, I announced the locations that we want to open in this year, and I have just announced a further 180 locations for the following two years.”
The complete record
Every one of 5,181 lines we hold for Pat McFadden, in date order, each linked to its source. Free to read, in full, without an account. Page 78 of 104.
“Although the proportion of people who work long hours has fallen, the opt-out remains an important flexibility for individuals and the economy. As my hon. Friend the Member for Dartford (Dr. Stoate) said, it is important that the opt-out is voluntary. We do not believe that people should be forced to work long hours against their wishes. Any worker who feels that he or she has been forced to opt out as a condition of taking a job, or is disadvantaged as a result of not opting out, can take a case to an employment tribunal. The Government were also prepared to accept the introduction of additional safeguards when we agreed the common position on amending the directive with other member states last June.”
“I regret the vote in the European Parliament, but while the hon. Gentleman is tempting me, I might turn to his party’s tactics in the European Parliament. When I look around for its allies who agree with the Opposition on renegotiating a ratified treaty of Lisbon, which political giants do I find? Which great statesmen support the Opposition’s position? The Dutch animals party, the French Hunting, Fishing, Nature, Tradition party, Sinn Fein and a number of communist parties. Those are the hon. Gentleman’s allies, and I will keep mine rather than trade them for his any day of the week. The existence of the opt-out is not the foundation of ever-longer working hours in the UK. In fact, in the past decade the proportion of UK full-time employees working long hours has fallen from about 22 per cent. to about 17 per cent.”
“That was reflected in the common position that we agreed last June, and it continues to be reflected in discussions in the Council since then. Following the European Parliament’s votes in December, we are now entering the formal process of conciliation, through which I hope that we can reach an agreement that secures our objectives. Several trialogue meetings involving the Parliament, the Commission and the Czech presidency have already taken place. The first formal conciliation meeting is scheduled for 17 March, with possibly more to follow. I can assure the House that we will continue to argue for the retention of the opt-out. We have been completely clear about that with the Commission, the Czech presidency and other member states.”
“The hon. Gentleman has intervened at the right time, because I am about to deal with the conciliation process and update the House on the negotiations. Throughout the lengthy negotiations, the Government have had two key aims: to reach a sensible solution about on-call and rest time, which the SiMAP and Jaeger judgments raised, and to secure the future of the individual opt-out. I believe that there is broad unity in the European Council on tackling the issues of on-call and rest time. Indeed, the vast majority of member states are seeking greater flexibility on those issues, precisely because of the SiMAP and Jaeger rulings. I stress again that the opt-out is not an issue just for the UK. Fourteen other member states make use of the opt-out and there is good support for our position in the Council.”
“That approach will not achieve for the UK; our approach can. We believe in opportunity and in the chance to work harder to lift oneself up and make a better life for oneself and one’s family. Sometimes, choosing to work longer hours is part of that. It is important to retain the opt-out, and that will be our objective in the weeks and months ahead. On that basis, I ask the House to back the amendment in the Government’s name. Question put (Standing Order No. 31(2)), That the original words stand part of the Question.”
“We will know one way or the other whether the conciliation process has succeeded before the European elections. We believe that the flexibility shown in the way that the UK has implemented the working time directive has been right. It cannot be argued that it has had a damaging effect on workers’ health and safety in the UK, because our health and safety record is good, but it can be argued that it is an important element of choice for workers, businesses and the economy as a whole. As we take the negotiations forward, it is important to contrast our engagement in Europe with the policy that would be pursued by the Opposition. How they hope to achieve anything for Britain in Europe by pursuing an isolationist approach that draws away from the mainstream of European politics is completely beyond most people in mainstream thinking.”
“The view that we have advanced is that the opt-out is widely used across the economy and a sector-by-sector approach would not give us the same flexibility. We believe that we should retain a wider choice in relation to the opt-out.”
“I want the other partner in that relationship to retain the choice to increase their hours, if possible, increase their earning power and help to keep mortgage, home and family together. It is important that people have the right to choose their working hours. That is why the Government intend to do what they can to retain the opt-out. We are in the conciliation process. We are arguing for the retention of the opt-out and we will maintain that position during the current negotiations. The Government’s position has been consistent throughout, not only because of the retained firefighter service, which has been stressed in the debate today, but because of wider reasons relating to the economy. The hon. Member for Hemel Hempstead asked about sectoral opt-outs and specific changes.”
“Compared with many other countries, we have a low proportion of those in employment reporting that work affects their health or causes them to suffer stress. In fact, since the working time directive was introduced, the proportion of UK full-time employees working longer hours has fallen by about one fifth, so it is not the case that there is a longer and longer working hours culture in the UK. The proportion of people working long hours has fallen, but we want to retain that important flexibility for workers. This is not just about retained firefighters; it is also a matter of choice for workers in other areas. Let us say that during the downturn, one partner in a married couple loses their job.”
“We were happy for workers to renew their agreement to the opt-out periodically, making it clear that it is a matter of choice. However, with those changes, we have made it clear that we want to retain the opt-out. I was asked whether that was still the Government’s position, and it is. Let me deal with the issue of health and safety. The working time directive has been in operation in the UK for a number of years, with the opt-out as part of it. Some 3 million workers in the UK regularly work more than 48 hours a week, and we do not have a worse health and safety record than other countries. In fact, the UK has the lowest rate of work-related fatal injuries and the third-lowest rate of non-fatal injuries, according to recent surveys of EU member states.”
“It is our aim, in the process of conciliation, to secure the future of the opt-out. Throughout the discussions, one thing that we have stressed is that it is a matter of choice for the individual and for member states. It is important, in European legislation on these issues, that we respect the different labour markets that operate in the 27 member states and that there is a choice. We have stressed that throughout the negotiations. That does not mean that we were not prepared to support change in the way in which the opt-out worked. For example, we were happy to support a position whereby the opt-out would not be signed at the same time as an employment contract, so that people could be assured that it was a genuine choice, because choice is important.”
“In June last year, we reached agreement in the Council of Ministers on a common position, which would have retained the opt-out and would have also dealt with the issue of on-call time, which has caused difficulty in a number of services, particularly health and social care, where residential on-call—that is at the heart of those judgments—has caused problems in shift patterns and so on. We were able to reach that agreement, precisely because it was not just a UK issue. We had the support of the majority in the Council of Ministers. The European Parliament amendments, to which the hon. Member for Huntingdon (Mr. Djanogly) referred, were then introduced, and there is a process called conciliation between the Council of Ministers and the European Parliament to try to reach a solution. The UK Government’s position has not changed.”
“One benefit of the debate is that although we have concentrated on a particular service and a particular sector, it shows the sort of impact—it has not been brought out properly in other debates—of simply adopting the European Parliament’s amendments to get rid of the opt-out and of not dealing properly with European Court judgments on inactive, on-call time, and the effect of that on our labour market. I shall explain the Government’s position. First, the opt-out from the 48-hour week is sometimes referred to as a UK opt-out. That is not so. The European Commission estimates that 14 or 15 member states use the opt-out. It is not a British issue, but extends throughout the European Union, as I know from my regular discussions with other employment and social affairs Ministers.”
“Member for Hemel Hempstead (Mike Penning), with his first-hand experience as a firefighter, told us how the full-time and retained services operate together. On the working hours of retained firefighters, my information is that about 10 per cent. of firefighters who work in the retained duty system already work 49 hours or more for their primary employer, and a further 25 per cent. work between 41 and 48 hours. It is clear what effect the opt-out could have on that group of workers.”
“I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing this debate. The issue is important, and in the time available I want to deal with two aspects of it: the importance of the retained firefighting service, and updating the House generally on the working time directive and the individual opt-out, which is at the heart of the difficulties that he and other hon. Members have raised this morning. We have heard about the importance of the retained firefighting service as part of the overall fire and rescue service in the United Kingdom, and I endorse the comments of support, gratitude and appreciation for the role that the retained fire service plays. The hon.”
“We have argued for that throughout and we will keep arguing for it in the negotiations.”
“Member for Huntingdon said, when it came to agency workers, the reason why we were able to sign the directive in the end was that we negotiated an agreement that gave us the flexibility that earlier drafts of the agreement did not. We did not simply sign the draft that had been put in front of us in the past; we negotiated an agreement that suited the UK. We want to retain the opt-out. It is important to stress that, while the negotiations are going on, a sudden change will not occur in UK workers’ hours. If there is an impression that that is about to happen, it is mistaken. Nothing will happen in the short term. In the immediate future, our priority is to negotiate a deal in Europe that continues to offer choice for individual workers and choice for member states about how they implement the provisions on working hours.”
“We would like to reach an agreement that preserves the opt-out. There are scheduled time scales built into the conciliation process of six weeks for this process and eight weeks for that process, so it should be possible to reach agreement before the present Commission and European Parliament reach the end of their life in a few months, but of course there is a danger that if we cannot reach agreement, the directive will fall. That is not the Government’s intention. We would like to reach agreement. This issue has been hanging over Europe for six years, but we want to reach the right agreement for the UK. To pick up on what the hon.”
“All this has become clear and all of it has become worldwide.”
“If he is serious when he says that there is nothing in the Government amendment that he or his colleagues could disagree with, I warmly welcome him to join us in the Lobby tonight to vote for the Government amendment. For its 300-year history, Royal Mail has been able to rely with a considerable degree of certainty on mail volumes rising and falling in line with the country’s gross domestic product. That was the case for many years, but in recent years that pattern has been overtaken by the technological revolution and the choices that citizens make every day about how they communicate with one another and how they do business: an e-mail sent is a letter not sent; a bill paid by direct debit is a letter not sent; family pictures posted on a photo-sharing website such as Flickr are pictures not sent through the post.”
“I thank the right hon. and learned Member for Rushcliffe (Mr. Clarke) for his introduction to the debate. I confess that my research on his past career must have been less than complete. I had not realised that he had held the post of Minister with responsibility for postal affairs some years ago, so let me begin my thanking him warmly for the legacy that he bequeathed to us. His experience will have given him a familiarity with the issues. The difference between the time when he had responsibility for these matters and now is the technological revolution, which lies at the heart of many of the difficulties that the company faces. The right hon. and learned Gentleman is an experienced and very canny politician, but I do not think the motion tabled by his party is the most canny thing that he has done.”
“I beg to move an amendment, to leave out from “House” to the end of the Question and add: “notes the threats to the future of the Royal Mail and welcomes the conclusion of the Hooper Report that, as part of a plan to place the Royal Mail on a sustainable path for the future, the current six days a week universal service obligation (USO) must be protected, that the primary duty of a new regulator should be to maintain the USO, and that the Government should address the growing pensions deficit; notes that modernisation in the Royal Mail is essential and that investment must be found for it; endorses the call for a new relationship between management and postal unions; urges engagement with relevant stakeholders to secure the Government’s commitment to a thriving and prosperous Royal Mail, secure in public ownership, that is able to compete and lead internationally and that preserves the universal postal service; further notes the Conservatives’ failure to invest in Royal Mail when they were in power in contrast with Labour’s support for both Royal Mail and the Post Office; and notes that legislation on these issues will be subject to normal parliamentary procedures.” We welcome the opportunity to debate the future of Royal Mail.”
“My hon. Friend is correct to say that there has been an increase in the volume of packets posted, but I have to tell him that the volume of mail sent overall has declined not just in this country but in many others. In just three years, the volume of mail posted in the UK has fallen by 5 million items per day. There has been an increase in the number of packets posted as a result of internet shopping and so on, but that increase is included in an overall drop of 5 million items a day. This effect is evident not only in the UK but in France, Germany, the Netherlands, Italy and many other countries.”
“John Potter, the US Postmaster General, said: “it is clear that the problems we are facing are intensifying…No one knows at what point mail volume will bottom out.” Unlike in the United States, dropping the Saturday service is not a route that we want to go down. For the first time, our USO is loss-making, but we believe it is valuable to the public and to the small businesses mentioned by the hon. Gentleman. We want to maintain it and to make the changes necessary to do so, rather than consigning our postal service to decline.”
“What I will say is that the maintenance of the universal service obligation—the six-day-a-week, one-price-goes-anywhere delivery—is extremely important. It is at the heart of the Hooper report and we are determined to preserve it. The US postal service has a monopoly on letters, and we have been urged by some critics of our proposals to examine it as an example of why the Government’s proposals are not needed. It was recently reported to be heading for a loss of $6 billion after a fall in mail volumes last year of 4.5 per cent. That has led the company to ask Congress for permission to drop the Saturday delivery. Mr.”
“I believe that the company said that it had no such plans. Hooper considered the background of change that I have set out and made three interlinked recommendations. The first was that the Government should address the historic pension deficit in Royal Mail. The second was that there should be a strategic partnership between Royal Mail and another postal or network company. The third was that the regulatory system should be changed.”
“We have enshrined the USO in primary legislation and we will continue to do so in the future. The falling volume of mail is not the only challenge facing the company. The pension deficit is another huge challenge. Three years ago, it was valued at £3.4 billion. The most recent estimate, in March 2008, was £5.9 billon. The next valuation is likely to be even worse.”
“I just said that Hooper gave three interlinked recommendations, one of which was a strategic partnership between Royal Mail and another postal or network company.”
“That is before the next valuation process, which is due to begin next month. We want to face up to the problem, on which the Opposition motion is completely silent. That is another reason not to support it.”
“Royal Mail will remain a publicly owned company. We have made that clear and that is why we do not believe that the process can be characterised in the way set out by my hon. Friend. Let me continue talking about the pension fund. Let us not underestimate the problems that it creates for Royal Mail. It is one of the largest pension schemes in the country and the liabilities represent more than 75 times the company’s profits, whereas the FTSE 100 average is two and a half times. Even other schemes with big deficits are dwarfed in comparison with Royal Mail’s; the liabilities of the next largest schemes range in size from nine to 13 times profits. In cash terms, the company’s total pension costs in the year to March 2008 were more than £800 million, of which £280 million was allocated for pension deficit recovery.”
“We all have an interest in this issue, and all right hon. and hon. Members’ views on it are valid. Addressing the pension deficit is not an easy decision. If we do that for Royal Mail, taxpayers are entitled to ask what change they will get in return. How will taxpayers have confidence that Royal Mail can make the changes it needs to make to cope with falling mail volumes and new technology? That issue is critical. As the Hooper report rightly says, only one company can deliver the USO; only one company can send a postman or woman up every garden path in the country six days a week. The health of Royal Mail matters, and we have to take the decisions necessary to secure its future.”
“I shall come back to the analogy of being a little bit pregnant. That policy said that we had set out a vision of a wholly publicly owned Royal Mail; we have for years. If my hon. Friend reads on, he will see that it also said we had commissioned the Hooper report to look to the future. Hooper has now reported and made his recommendations.”
“Partnership offers the opportunity not only to inject new capital into the business but to bring in expertise and the confidence to make the changes that the company has so far not made far enough or fast enough.”
“First, the £1.2 billion that the Government gave Royal Mail two years ago is a commercial loan, which must be repaid to the Government. Secondly, that form of finance is neither fast nor flexible. Even after lengthy negotiations between the company and the Government, two years on the European Commission is still deliberating about whether the financing is allowable under state aid provision. Royal Mail must not only complete, install and use the new machinery that it needs, but develop new products. The idea that the company’s problems will be over if we lift the pensions deficit is wrong. The company needs ongoing capital and expertise to combine the use of mail with other technologies. We have seen too little of that in the UK.”
“No, I must make some progress. Royal Mail has made some progress in recent years. Its performance in delivering first-class post by the following day has improved and some investment in new machinery has been made. However, it is still less automated than many comparable services. There is still a great deal to do, to secure not only automation but the delivery of new products. One example used in the Hooper report is walk sequencing—the last stage of post sorting before the delivery round. That is done by hand in the UK, while some competitors do 85 per cent. of that work by machine. Much has been made in recent weeks of the finance needed to make progress on the issue. I want to make two points about that.”
“I think the hon. Gentleman will find that millions of bank accounts are available to post offices. Perhaps people do not know enough about that. Many day-to-day banking services are available through post offices.”
“The Government will own the majority of the company and appoint the majority of the board, and it will still count as a publicly owned company. Royal Mail will not be privatised, and the partnership that we propose is not the first step towards privatisation. That is one reason why we will not be voting for the Opposition’s motion.”
“The critical point about the £1.2 billion that has been missed in recent weeks is that this is a commercial loan that has to be repaid, not a grant that is simply given by the Government to the company. Let me say a bit more about the issue of partnership. Hooper recommends a partnership with another postal or network company that has carried out the kind of change with which Royal Mail needs to go further and faster. The nub of this debate is what this means and why it is necessary. It does not mean privatisation of Royal Mail. A company is either publicly owned or not, and with this Government Royal Mail will remain publicly owned. Let me make it clear that that will be specified in the legislation to implement the Government’s proposals.”
“I am making it clear that because the Government will still own the majority of the company, it will be a publicly owned company and will count as such. Privatisation is not our intention, but partnership on a minority basis can be of real benefit to the publicly owned Royal Mail by giving it access not only to capital but to the experience and commercial confidence needed to drive through change. There is another important point about this. A partnership can also help to make Royal Mail a bigger player at a time when European postal markets are liberalising and consolidating.”
“I want to make some progress. By the end of next year, there will be liberalised postal markets in most of the 15 European Union member states, and two years later throughout the whole EU. Royal Mail already has a presence in Europe through its purchase several years ago of the GLS parcels business. In future, there is likely to be further consolidation in the European postal market. Earlier this month, the Swedish and Danish authorities announced that they had signed the final shareholders’ agreement to merge their national postal companies. A joint venture can make Royal Mail a bigger player in Europe and able to play a leading role as the market develops. We should not turn our back on those opportunities because ideology stops us from considering a partnership even on a minority basis.”
“Disputes are frequently threatened, such as those threatened on pension changes or mail centre changes, which we saw in recent months, and they are hurting the company. They slow the pace of necessary change, and they hurt the customer and the mail market, as people are tempted to switch to other digital communications to meet their needs. For everyone to agree that they are up for change in general, but to oppose it in the particular is no way forward.”
“And the Conservative party prides itself on knowing business. The difference between a majority and a minority shareholding is fundamental in business, and my point is that Royal Mail will remain a publicly owned company. If the work force fear the consequences of a partnership, I say this: industrial relations in Royal Mail, as Hooper pointed out, are in urgent need of a fresh start. Change has been hampered by a lack of trust between management and work force. In 2007, as the right hon. and learned Member for Rushcliffe said, 627,000 employee days were lost as a result of industrial action, accounting for 60 per cent. of the total days lost to strikes throughout the whole UK economy in that year. It is not just a question of that major strike, but the threat of other strikes, too.”
“I will give way in a moment. We need a longer-term plan, with a proper buy-in from the work force, and an acceptance right through the company of what needs to happen. A reformed board, with influence at every level of the company and with the experience of going through such change, can offer the fresh start in industrial relations that the company sorely needs.”
“If my hon. Friend is referring to the company that I think he is, he will find that it recognises trade unions and operates with them on a day-to-day basis. This is an important point. The idea that the industrial relations of the company are better as they are than they would be under a different arrangement does not bear comparison with the urgent need to improve industrial relations in this company.”
“Regulation will continue to be important in ensuring that the postal service maintains the USO in the wider communications market. As I said, Royal Mail as a company is in a unique position to deliver to 28 million business and residential addresses. The postal market needs a regulator that understands the wider communications market and the part that the post plays in that market. We believe that Ofcom will be able to fulfil that role and its primary purpose in regulating the postal market will be to maintain the USO.”
“I have given way a couple of times and I would like to turn to the question of regulation. Regulation, and how competition functions, is a crucial part of the picture and again one that the Opposition motion is silent on. The argument has been made that competition from other postal companies is at the root of the Royal Mail’s problems. It is true that that has meant a loss of revenue, but as Hooper reports, that loss is more down to competition from new technologies than from other mail companies. Let me make the Government’s position on this issue clear. Competition from other mail companies will not go away but, as we make the other changes, it is right that we look at the terms of that competition and its impact on the universal service obligation.”
“My right hon. Friend, who has long experience of these matters, is absolutely right. Competition with other mail companies does matter to Royal Mail, but competition with other technologies has lost it far more revenue. The figure that she gives is correctly quoted from the Hooper report.”
“The Hooper report states that Royal Mail needs to make changes to sorting and delivery offices and, given the automation that is occurring, that need is recognised throughout the company.”
“The Post Office is partly a social and community service, and the network of about 11,500 branches depends on Government subsidy to survive. We will keep that network in 100 per cent. public ownership, although of course most post office services are delivered by sub-postmasters, who are private business people and often have their own businesses attached. Like many Members, I want the Post Office’s banking and financial services offering to be expanded. It is a trusted brand and has more branches than all the banks put together, so it has real potential in that area. However, with post offices accounting for a little more than one tenth of Royal Mail Group’s overall turnover and even that proportion depending on subsidy from the Government, we should not pretend that such an expansion can solve its problems.”
“Hooper is quite clear that he believes that a valuable partnership will be with a postal or network company that has carried out changes such as Royal Mail needs. I cannot comment on every discussion that the Department has, but that is the recommendation in the report and the outcome that we seek. I wish to say a word about post offices. I know that the debate is about Royal Mail, but right hon. and hon. Members care a great deal about post offices. The closures of the past year were difficult for local communities, but now that they are drawing to a close, the network is in a more stable position. The Government made clear the future of the Post Office card account shortly before Christmas, and we are now working with the Select Committee on Business and Enterprise and Post Office Ltd to identify future new areas of business.”