Ed Davey
MP for Kingston and Surbiton · Liberal Democrat · United Kingdom
“I associate myself with the Prime Minister’s opening remarks, not least about the 25th anniversary of the horrific terror attacks of 9/11. I welcome the Government finally banning imports from illegal Israeli settlements, something Keir Starmer should have done a long time ago.”
“I thank the Prime Minister for that answer. Britain should be the safest country in the world to have a baby. We will keep raising this issue until it is the safest.”
“No mother should have to give birth in such circumstances. Does the Prime Minister agree that Musgrove Park cannot wait until 2033 for work to start on a new maternity unit? Will he offer a meeting to local MPs, so we can move it forward? And will he make fixing the maternity scandal across our country a top priority of his Government?”
“I hope at that summit the Prime Minister will negotiate a good deal for our country, our economy and our defence, and that means rejoining the single market. North Devon’s maternity unit has been closed for three weeks due to staff shortages, so women now have to travel for up to two hours to give birth.”
“The Prime Minister said yesterday that Brexit ushered in “a decade of low growth and stalled regeneration.” —[ Official Report , 1 September 2026; Vol. 790, c. 27.] He is right. Our economy is stuck in this mess thanks to the Conservatives—and the leader of Reform UK—and their terrible Brexit deal.”
“There are so many more problems in our political system: too much power in the hands of social media barons who interfere in our politics and crypto billionaires who use donations to buy influence; and too little power in the hands of our people.”
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“It is that proud and rich postal history that Lords amendment 11 seeks to protect, by requiring Royal Mail to report annually on its activities in relation to the British postal museum and archive. Having visited the British postal museum and archive, I can say that it provides a wonderful and fascinating record of our postal heritage, and is absolutely deserving of the protection that Lords amendment 11 seeks to provide. I would be quite keen to share with the House the benefit of my visit and some of the lessons that I learnt—for example, that the first post boxes were green, before moving to chocolate brown and then ending up one of the shades of red that we see across our country—but I am sure that you would bring me to order if I did, Madam Deputy Speaker.”
“Furthermore, those amendments would ensure that the report on mutualisation provided for under clause 5 must be laid prior to the vote, so that hon. Members have full and detailed information on the mutualisation plans before they debate and vote on them. Let me be clear, however, that the plans, as I have said before, will be developed from the bottom up and in full consultation with all of the Post Office’s major stakeholders. The last amendment in this group—Lords amendment 11 —addresses an issue that I know is close to the hearts of many hon. Members. When my right hon. Friend the Business Secretary opened the debate on the Bill on Second Reading, he talked of this country being a pioneer of postal services in the 19th century.”
“However, I acknowledge that our position—that mutualisation must be a bottom-up process that engages sub-postmasters, customers and management—means that we cannot be as explicit now about what that mutual will look like. Co-operatives UK has now published its report on the options for a mutual, and that report will form the basis for the Government’s full public consultation in due course. Until the conclusion of that process, the Government remain open to all views. We will not dictate the form that mutualisation will take. To give both Houses more oversight of what an eventual Post Office mutual might look like, we have tabled Lords amendments 2 to 8, which would introduce the affirmative procedure to the powers to mutualise Post Office Ltd.”
“However, Lords amendment 1 will ensure that, prior to a sale of shares in Royal Mail, Parliament has a snapshot of the expected commercial relationship following the sale, and Lords amendment 9 would make it clear that the annual report on the post office network must include information every year on the postal services provided as part of that relationship. Lords amendment 10 is a technical amendment to clarify the enforcement powers that apply to the annual report on the post office network. There can be no doubt that the future of this iconic British institution is of enormous interest to Members of this House and in the other place. I believe that a mutual Post Office is a radical and exciting proposal, and one that is supported by all parties.”
“That is why the chairman of Royal Mail, Donald Brydon, felt able to say to the Bill Committee that prior to a sale of shares in Royal Mail, the two companies would put in place a new contract for the longest time legally permissible. I have gone on the record—and I am happy to do so again today—as saying that the Government, as sole shareholder, will ensure that the two companies fulfil this commitment. The negotiation of that contract is, rightly, a commercial matter for the two companies, and not for the Government or this legislation.”
“As I previously said to the Public Bill Committee, I will ensure that shares are placed in the employee share scheme from the time of the very first sale of shares in Royal Mail. The second of the new requirements—to provide information on the expected commercial relationship between Post Office Ltd and Royal Mail after the sale of shares—will work together with amendment 9 to address a key concern that I know is held by many in the House. After much debate in the House and elsewhere, I can still see no reason why the strong commercial relationship between Post Office Ltd and Royal Mail should weaken after the two companies have been separated. More importantly, the senior management at Royal Mail has been clear that this relationship will continue.”
“I begin my main remarks on this group of amendments by commending Opposition Members on pushing us on whether, given our commitment to transparent government, more could and should be done to offer more information to Parliament. Amendment 1 is a direct response to that. Clause 2 already commits the Government to report to Parliament when a decision to dispose of shares has been made. Amendment 1 adds three new requirements for that report: first, that it must include the objective for the sale; secondly, that it must include details of the expected commercial relationship between Royal Mail and Post Office Ltd following the disposal of shares; and thirdly, that where the proposed disposal would result in shares being placed into the employee share scheme for the first time, the report must include details of that scheme.”
“The Government will submit a formal stated notification in the next few days, and I hope that the process will be completed by March 2012. We will discuss amendments to part 3 of the Bill, which deal with the new regulatory regime, later on, but of course implementing that regime will be another crucial step towards securing the future of the universal service. I would like to assure hon. Members that the work to establish this is already under way. In particular, Ofcom, the new regulator, will launch a consultation in the autumn with a view to establishing the new regulatory framework in the spring of 2012. I hope that that update is helpful.”
“Members will appreciate what a relief it will be to the 435,000 members of the Royal Mail pension plan to know that their accrued pension rights will be protected sooner rather than later. The key concern of people up and down the country is that the universal service must be protected. To do that, Royal Mail needs to be on a sustainable commercial footing. The company currently has about £1.7 billion of debt facilities with the Government. We need to restructure the company’s balance sheet in due course, and in order to put Royal Mail on that sustainable commercial footing, we will need to reduce significantly that level of debt. Of course, we will need approval from the European Commission to provide this financial support, and we have already begun informal discussions with the Commission.”
“I am clear that when it comes to undertaking a sale of shares in Royal Mail, the Government must have the flexibility to negotiate the right deal at the right time. I know that hon. Members have been anxious to hear more about the next steps in our plans for Royal Mail, so with your indulgence, Madam Deputy Speaker, and in the interests of transparency, I would like to set out briefly the next two crucial steps that need to be taken to secure the future of Royal Mail. As my noble Friend Baroness Wilcox said on Third Reading in the other place, the Government intend to take on Royal Mail’s historical pension deficit with effect from March 2012 as part of the preparations for the sale of the company. I am sure that hon.”
“I would like briefly to take hon. Members back to the Bill’s Third Reading in this House, when I marked the passing of the Bill into the capable hands of the other place by saying that the coalition Government’s decision to take on this difficult issue showed them at their strongest and most radical. As we welcome the Bill back, I would like to add to that and say that the Lords amendments before us today also show government at its most open-minded and collaborative, because they represent the constructive and collective efforts of both sides of the other place to improve and strengthen the Bill. The amendments in this group concern part 1 of the Bill and the provisions for the ownership of Royal Mail and the Post Office.”
“Will the hon. Gentleman tell the House which part of the Bill he is worried about? Which part will cause the fragmentation he is describing?”
“The previous Government failed to do anything, although I should pay tribute to Lord Mandelson, who had the decency, on Second Reading in the other place, to recognise that we were on the right track with this Bill. The fact that Labour Front Benchers are unable to recognise that today is testament to Labour’s unwillingness to face up to the reality of the challenges.”
“The hon. Member for Linlithgow and East Falkirk (Michael Connarty) finished where the hon. Member for Llanelli (Nia Griffith) started—in total opposition to the Bill. I have to tell the Opposition that they are ignoring the economic and financial reality of Royal Mail. As a result of the reduction in letter volumes because of technology such as e-mail, the internet, text messaging and social networking, it is losing a huge amount of money. The reduction in letter volumes—its core business—is predicted to fall again and again, but it is not only Royal Mail that is affected. Every postal administration around the world is seeing letter volumes and revenues go down. That means that those administrations are leaching money and something has to be done.”
“People arguing that point try to pray in aid the BT example, but the Public Bill Committee heard evidence that 66% of BT employees held on to their shares after the share plan had matured, so there is longevity in share ownership, even with the individual model. A lot of myths are cited by those who oppose employee share ownership, which was no doubt why the Labour party did not include employee shares in its 2009 Bill.”
“The Government would certainly not object to a proposal that shares and their benefits should be allocated evenly across employees to ensure that there is equal entitlement regardless of grade, salary or length of service. We have been clear that the scheme is for all employees of Royal Mail, not just the management, so I hope that people will not run away with the wrong idea. Several Opposition Members asked what would stop employees selling shares immediately. Again, we are not making premature decisions about the scheme’s design, but we have always said, as I have repeated several times, that we are designing the scheme with longevity in mind—there are many attractions to a trust model for that very reason. However, it is not true that individual employees’ shares are always sold off by those employees.”
“We would certainly want to report on such things as the terms by which shares would transfer to the employee share scheme and the design of the scheme. Such detail might include questions of whether there would be a trust model or individual shares, or a mixture of the two. There would also be consideration of the percentages to be transferred and the governance arrangements. The hon. Lady asked how the shares will be allocated, but clearly that is a point for later discussion. Such a point might be addressed in the report. We can imagine allocating shares to employees on many bases, such as length of service, grade and salary.”
“I would have thought that she would have realised that, because it has been accepted by many who have examined the situation in detail. The hon. Lady says that the absence of such provisions means that there is no protection for post offices, but the whole point is that the detail set out in our policy statement will enable them to be more profitable. It is real business that will save the post office network, not legal provisions in the Bill, so I disagree with her point. The hon. Lady spent some time talking about employee shares. The Lords amendments will require the Secretary of State’s report to Parliament at the time of first sale of shares to include details about the employee share scheme. I would have thought that she would have supported that welcome development.”
“I am looking forward to doing that, Madam Deputy Speaker. The hon. Member for Llanelli welcomed Lords amendment 1 but felt that it did not go far enough. Despite all the arguments we have had in this place, she still believes that an inter-business agreement should be in the Bill, as do a number of her party’s members. I do not wish to rehearse the long speeches that were made on Report, when our debate on this particular point lasted for about three hours, but let me repeat that putting provisions in the Bill in the way in which the hon. Lady suggests would create a significant risk of legal challenge owing to incompatibility with competition law. In addition, such an approach would almost certainly face a state aid challenge.”
“Our policy statement and the things that we are delivering show that there is a real future for the front office of government.”
“I listened carefully to that interesting point in the hon. Gentleman’s speech, and the way in which he eloquently described the situation and referred to the Companies Act 2006 showed that we need to ensure that we design the scheme carefully. We will do so, because we want to deliver on employee share ownership, which is an objective of the Liberal Democrats, the coalition Government and the Bill. The hon. Member for Llanelli was generally supportive of the proposals on mutualisation, but she spent a lot of time—do tell me if I stray out of order, Madam Deputy Speaker—saying that Government front-office services had not been delivered. We are turning around the decline under which the previous Administration took away more than £300 million of Government services from post offices.”
“The hon. Lady is in no position to criticise the Government about this, but I am happy to allow her to intervene—I hope that she will be able to remain in order.”
“I would have thought that she would have welcomed such pilots.”
“The hon. Lady is right—and we have been clear about this—that the network must be viable before going to mutualisation. The problem is that we inherited a post office network that was so badly managed that we had to turn it round. She asks for specific details, but she knows that several were set out in our November policy statement. She ought to know that the National Federation of SubPostmasters welcomed the start of the pilot scheme offering document verification for pension applications in 106 post offices in the north-east. She should also know that that is only the first of three planned pilots with the Department for Work and Pensions; the other two involve national insurance applications and testing the impact of requiring jobseekers who sign on by post to attend their local post office instead.”
“Such developments have been welcomed by the National Federation of SubPostmasters, but of course we want to go further, which is why we are so pleased to have persuaded the Royal Bank of Scotland to enable its customers to access their bank accounts through the post office network, which we believe will start to happen from September. I would have thought that the hon. Lady would welcome such developments.”
“I expressed my disappointment that Post Office Ltd did not win that contract from the Department for Work and Pensions, but I have described three pilots on which the DWP is working with Post Office Ltd. I could also have talked about the proposals on credit unions that we hope will go forward, or the fact that Post Office Ltd has won a contract with the London boroughs so that local authority staff can have an authentication service at the local post office. If that scheme develops, it might have applications throughout the country.”
“They had allowed the post office network and the process for developing new business to wither on the vine because they were so busy closing 7,000 post offices. I have to tell Opposition Members that the tender for the green giro began under the previous Government, so they really ought to be careful. We have had to deal with the tender that Labour Ministers wrote.”
“I certainly would not—but when Labour Members make such points they really have a cheek, because their Government removed more than £300 million of Government services from the post office network. We are working hard across the Government to ensure that we can position Post Office Ltd in a place from which it can win contracts from Government Departments in Whitehall and local authorities to deliver the front office of government. I can tell the hon. Gentleman that a huge amount of work is being done on this, and he needs to be a little patient. The problem is that when we came into government and developed the strategy, the cupboard was bare because the previous Government had done almost nothing.”
“The modernisation that the Bill and the amendments will enable us to undertake with the £1.34 billion will allow us to go further and continue the transformation. I believe that what we have with the funding package and the proposals is a radical change, but one that will lead to a sustainable network. He knows, because I wrote to him on 9 February, that the post office in Perry Common closed under the previous Government. Reopening it would lead to business migrating away from nearby offices at College road and Hawthorn road, which could jeopardise all three offices, which I am sure is not what he wants.”
“Its general secretary, Mr Billy Hayes, said: “We warmly welcome these amendments…We are pleased that Government has taken on board some of our concerns”. I have met the CWU, and it has noticed the progress that we have made. The hon. Member for Birmingham, Erdington (Jack Dromey) complained that post offices in his constituency would close as a result of the amendments, but I hope that he tells his constituents that four post offices closed in his constituency under the previous Government. All Members across the House will have discussed post office closures with many people in many communities. What we are offering in these amendments and in the Bill is hope that the Post Office will not see a repeat of those closure programmes, which have devastated so many people. The hon. Gentleman asked what would happen after the spending review.”
“I wish that Opposition Members who have spoken today had been there, because the sub-postmasters showed greater confidence in the future of their post offices and their businesses than they do. I will respond to some of the comments made by other hon. Members who have spoken. I thank my hon. Friend the Member for Solihull (Lorely Burt) for her comments. She mentioned the benefits to employees that will result from the proposals on employee shares set out in the amendments, and she mentioned pensions, which we will come to later. She specifically asked what discussions we have had with the Communication Workers Union on some of the amendments. It is interesting that on 13 April the CWU issued a press release in which it said that it welcomed the amendments to the Bill.”
“I agree that we should focus on the long-term viability of the post office network. I recently attended the annual conference of the National Federation of SubPostmasters in Torbay, where we discussed the sorts of thing we are proposing and they were able to look at the new machines that Post Office Ltd is developing to position itself to win Government contracts, such as the application, enrolment and identity machine, which is already being used for contracts from the Driver and Vehicle Licensing Agency. They already have a portable one, which could be used across the network, and a number of other machines. The sub-postmasters were absolutely delighted.”
“I say to the hon. Gentleman and his constituents that they should look at the economics of the post office network in the area, because there are other post offices nearby, and talk with Post Office Ltd about the “locals” model that my hon. Friend the Member for Folkestone and Hythe (Damian Collins) mentioned. The “locals” model holds real prospects for dealing with some of the post office network’s cost problems, and for helping to revive shops on our high streets by bringing them and post offices together. In our pilots, not only have postal operators liked the model that we are developing, but so have post office customers and local communities. Having seen the evidence, some communities that were sceptical have been delighted by the service quality that Post Office “locals” have delivered. That is the future, and my hon.”
“The reason why I am not agreeing to the hon. Gentleman’s kind invitation is that, under legislation that has been on the statute books for many years, and based on the practice of the previous Government, Post Office Ltd decides where Post Office “locals” open, so if that is his request he needs to address it to Post Office Ltd managers.”
“On the train down to the annual meeting of the National Federation of SubPostmasters, I read the federation’s account of its 100-year history, which mentions the concerns that existed when telegrams were being phased out, and when postal orders were used. In other words, the business and services that have gone through our post office network have changed hugely, and we have had to develop them and move on, so setting things in aspic—putting things in the Bill, as some Members want—would not help.”
“Far from it: one of the Bill’s main objectives is to secure the universal service, and Opposition Members have failed to realise that clause 30 includes stronger protections for the universal service than was previously the case. The hon. Member for Angus (Mr Weir) made a very informed speech. He was a distinguished member of the Public Bill Committee, who failed to attend only on the few occasions when the weather prevented him from flying down to London, but in looking at the amendments before us I have to say that he has made the mistake of calling for guaranteed business for the post office network and, almost, of wanting to keep things in aspic.”
“There have been Post Office “locals” pilots in all parts of the country. We are up to 80 local schemes, and Post Office Ltd has tried to pilot them in urban, rural, suburban and urban-deprived areas. It is trying to test them out over time, taking account of seasonality and cash flow, so we are learning an awful lot of lessons from them. The recent analysis of the “locals” project by Consumer Focus is publicly available, and although it has some concerns about privacy it was able to show that on issues such as access, longer opening hours and reduced queues, people have found the projects to be a beneficial step forward. The hon. Member for Strangford (Jim Shannon) said that he was concerned about the universal service obligation and worried that the Bill would undermine it.”
“We are in danger of going over old ground. The hon. Gentleman will know, because we have had this debate many times, that it is my view that post offices are in a very strong position in this negotiation, because the idea that Royal Mail is going to absent itself from the post office network and allow its competitors to go in there is, frankly, nonsense. As for the particular issue that he has been raising with Post Office Ltd—the closure of Ferryden post office—he will know that that closed not because of any action of the Government or Post Office Ltd but following the resignation of the sub-postmaster. Post Office Ltd is looking at all available options to keep that service in his constituency open.”
“Someone who goes to sorting offices such as Gatwick, Greenford or Cardiff, as I have done, sees a world-class mail system and the rolling out of a programme of modernisation that involves the workers directly and has as one of its key objectives the health and safety of those workers. Sorting offices are being made not only more productive but safer. There is great employee involvement. If we link that with employee share ownership, this business will have a real future. I hope that the House will welcome this group of amendments from the other place, and give them its approval. Lords amendment 1 agreed to . Lords amendments 2 to 11 agreed to . Clause 21 Restriction on power to transfer assets”
“I am sure that the hon. Gentleman will be engaging in that debate with Post Office Ltd. The hon. Member for Linlithgow and East Falkirk (Michael Connarty) asked, in the context of the report, what objectives we have for Royal Mail and the Post Office. We have made it very clear that securing the universal service obligation is our top objective. Getting a good deal for Royal Mail and for the taxpayer is essential. There is no objective of fragmenting Royal Mail as he described. When he suggested that employee shares were not a good thing for employees, I began to despair. The only correct thing that he said was that employee share ownership—ownership of the company in which one is working—needs to be combined with involvement in worker participation. We should look at what is happening in Royal Mail at the moment.”
“The Bill provides a safeguard in clause 21 so that the ratio of assets to liabilities in the RMPP must be no worse after assets transfer to the Government than before. However, we intend to go beyond that minimum and leave the RMPP fully funded after transfer, subject to state aid approval.”
“However, there will be a time lag between this point and the point when the necessary actuarial valuations are finalised. We will need a second transfer to take place when the scheme valuation has been completed: a corrective, or “mop-up”, transfer. The amendment ensures that this two-stage transfer is possible and that any adjustments applied to the second transfer are disregarded so that the funding level test to protect RMPP funding levels works as intended. This funding level test, assessed at the effective date of the transfers, should not be affected by any market movement in the assets that transfer later. In supporting Lords amendment 12, I would like to be clear on one broader point.”
“The amendments in this group are either minor or technical—or, indeed, both. However, they make some important improvements to the Bill that I hope all hon. Members will feel able to support. Lords amendments 12 to 14 concern the pensions provisions. Lords amendment 12 is, I must confess, not the easiest technical amendment that hon. Members will have had the pleasure of scrutinising, but I will attempt to explain it as clearly as possible. The amendment concerns the transfer of assets from the Royal Mail pension plan—RMPP—to the Government and is designed to deal with the fact that we expect the assets to transfer in two tranches. An estimated amount of the assets will transfer when Government takes on the historical liabilities of the RMPP.”
“I thank the hon. Lady for welcoming the amendments, and I hope that the rest of the House will support them. Lords amendment 12 agreed to . Lords amendments 13 and 14 agreed to. Clause 27 General authorisation to provide postal services”
“Members on both sides of the House and by colleagues in the other place. I hope that this package of regulatory amendments demonstrates that we have listened to the concerns of hon. Members and those in the other place. The amendments constitute a real strengthening of protection for the universal service—an objective that I believe all hon. Members share—and as such, I hope they are warmly welcomed.”
“However, although we are clear that the reasonable needs of users is the right test, it is conceivable that in some cases the Government will wish to apply different considerations. For example, the Government may have wider public policy objectives to consider, perhaps in relation to rural policy or small business support. Such broader public policy goals are rightly a matter for the Government and not for an independent sector regulator. Therefore, amendment 19 allows the Secretary of State to step in and require Ofcom to ensure sufficient access points throughout the United Kingdom to meet the interests of the public. That is not a power that we would ever expect to use—its inclusion simply serves as a fail-safe to address the legitimate, albeit unlikely, concerns expressed by hon.”
“The Bill already specifies that Ofcom’s duties include ensuring that there is provision of sufficient access points to meet the reasonable needs of users. In determining those, Ofcom will conduct thorough research and analysis, and consult users to take their views into account. Importantly—this was often misunderstood in our previous debates—Ofcom will also be bound by its broader duties, as set out in the Communications Act 2003, to have regard to, among other things, the needs of persons with disabilities, the elderly, those on low incomes and those living in rural areas. I am confident that that will mean that Ofcom’s requirements on the distribution of access points across the country will ensure that all users can continue to post their letters, packets and parcels in a convenient way.”
“I stress that the notification condition is aimed at avoiding damaging cherry-picking that would put in jeopardy the long-term security of the universal service. As such, our clear view is that the condition should apply only to those operators seeking to commence or expand a significant letter delivery service, but it will not impose any additional burden on, for example, current access competitors, courier services or parcel delivery businesses. Finally, Lords amendment 19 addresses concerns, which were again raised in both Houses, about access to postal services. The central concern of hon. Members who have raised this issue is how we can ensure that people right across the country and from all walks of life continue to have access to the high standard of postal service on which they depend.”
“Lords amendments 15, 20 and 25 address that by giving Ofcom the power to require operators to pre-notify them of the planned commencement or expansion of a letters business on a specified scale. We have left the precise scale for later definition—it will depend on the market at the time—but our clear intention is that that should apply only to a significant letter delivery operation that could have a damaging impact on the provision of the universal service. That notification mechanism will ensure that Ofcom has the necessary time to evaluate the potential impact on the universal service of such an operation before the operation has commenced and, critically, before any potential damage has been done to the security of the universal service.”
“Members have raised concerns about the prospect of other operators cherry-picking profitable elements of Royal Mail’s delivery business and, as a result, putting the security of the universal service at risk. The Government have reflected on those concerns, and during the Bill’s passage through the other place engaged in constructive discussion with Opposition Front Benchers there, as well as with Royal Mail and the Communication Workers Union. Although we are confident that Ofcom has the necessary tools to ensure fair and effective competition in the market, it is our belief that on occasion it will need to build in greater time to inform its use of those tools.”