Tag: Peter Mandelson

Below is the text of the statement made by Peter Mandelson in the House of Lords on December 16th 2008.

My Lords, I wish to make a statement about the Royal Mail.

This Government is firmly committed to a universal postal service: that is, the ability of the 28 million homes and businesses across the country to receive mail six days a week, with the promise that one price goes anywhere.

The universal service helps to bind us together as a country. And, as well as its social importance, it is the means by which many companies build and operate their businesses, but it doesn’t come free.

Last December, John Hutton invited Richard Hooper to lead a full, independent review of the postal services market. Its purpose was to look ahead to the future and to recommend the steps needed to sustain the universal service, in a world where technology, consumer behaviour and the communications market are all rapidly changing. The review did not cover the Post Office network.

I have now received Richard Hooper’s final report. It is a serious, wide-ranging study, and makes sober reading. We are publishing it this afternoon. I am very grateful to Richard Hooper, and to Dame Deirdre Hutton and Ian Smith, for their work on it.

Hooper’s conclusions

Let me set out Hooper’s analysis of the challenges facing the Royal Mail.

First, there has been a revolution in communications technology over the past decade as consumers turn to emails, the internet and text messages. In this country 60 billion text messages were sent last year. And we now send five million fewer letters per day than two years ago.

Hooper is absolutely clear that the main challenge to the Royal Mail is from the impact of changes in technology and consumer choices. His estimate is that, last year, the shift of mail to these new technologies cost the company £500 million in lost profits. That is five times the impact of business lost to other postal companies in our liberalised market. The message is therefore clear. Making these other companies go away is not the answer to the Royal Mail succeeding.

Royal Mail’s success matters because it is the only company capable of delivering mail to every address in the UK, six days a week. And as Hooper makes clear that will be the case for the foreseeable future.

So a healthy Royal Mail is vital to sustaining the universal service.

The second challenge is efficiency. Hooper reports that Royal Mail is less automated and less efficient than its Western European counterparts. In modern European postal companies, 85% of mail is put in walk-order by machine for delivery to the individual home or business. By contrast, in Britain, in local delivery offices it is still done entirely by hand. The Royal Mail urgently needs to catch up and modernise.

The third challenge is the Pension Fund. Hooper warns that Royal Mail has a large, growing and volatile pension fund deficit. This is near impossible for the business to manage and is a huge demand on its revenues. Each year on top of its regular £500 million contribution to the pension fund, the company is having to find an extra “top up” of £280 million to plug the deficit. These payments look set to rise substantially when the fund is re-valued next year.

Fourth, Hooper says labour relations in the company need to improve. Levels of trust and co-operation are low. Industrial action takes place too often. A fresh start in industrial relations is badly needed.

Fifth, regulation. Hooper also reports a lack of trust in the relationship between the company and the regulator. There are disagreements about basic information and these tensions divert energy from the chief challenge of modernising the business.

So overall, Hooper’s conclusions are crystal clear. The status quo is untenable. The universal service is under threat. The choice we face is either downgrading the universal service as we manage decline or acting now to turn things round and secure the Royal Mail’s future.

Hooper’s Recommendations

At the heart of the Hooper report are three linked recommendations.

Pension deficit

First, the pension fund deficit. Hooper recognises that this represents a significant challenge for the company.

The Report recommends that as part of a package of changes, the government should take over responsibility for reducing substantially the pension deficit. I would stress that Hooper says this would only be justified as part of a coherent package to secure the Royal Mail’s long term viability.

Partnership

Secondly and closely related, to improve the Royal Mail’s performance it should forge a strategic minority partnership with a postal operator with a proven record in transforming its business, working closely with the workforce. This, Hooper believes, would give Royal Mail the confidence, the experience and the capital to make the changes needed to improve performance and face the future. In other words, save the Royal Mail by investing in its future.

Regulation

Finally, regulation. Hooper proposes Ofcom should take over responsibility from Postcomm for regulating the postal market. Its primary responsibility would be to maintain the universal service in the wider context of the other changes taking place in communication markets.

Government response

My Department will want to study the report in detail. I intend to respond with a full statement of our policy in the early part of next year.

With backing from the Government, the Royal Mail has been improving performance in recent years. But progress has been too slow and Hooper is clear that, in the face of the challenges confronting the company, transformation must be faster and more far reaching.

I can say now that the Government agrees with Hooper’s analysis and the recommendations. As he does, we reject cutting back the universal service. Indeed, we share his ambition for a strong universal service and strong Royal Mail. And we intend to take forward the recommendations as a coherent package of measures.

We will fulfil our manifesto commitment to “a publicly owned Royal Mail fully restored to good health, providing customers with an excellent service and its employees with rewarding employment”. Bringing in a partner through a minority stake in the Royal Mail’s postal business will help us deliver that goal. It will bring the Royal Mail fresh investment, new opportunities to grow in Europe and internationally, and to offer new services. It will provide a fresh new impetus to modernising the Royal Mail and securing the universal service.

We and the Royal Mail have already received one expression of interest from the Dutch postal company, TNT, to build such a partnership. I very much welcome this approach from an experienced postal company, just as I will welcome other expressions of interest from credible partners should they come forward. My Department will pursue this in the coming weeks.

Post Office

Finally, I should comment on the Post Office, which was not part of the review’s terms of reference.

The network of local Post Offices combines a unique set of commercial, public and social roles. In recognition of this a partnership would not include the Post Office network.

But a healthier Royal Mail letters business will be good for the Post Office. Today’s announcement will help underpin our existing commitment to the Post Office network. We are providing £1.7 billion to 2011 to support a network of around 11,500 branches. We will continue to support the non-commercial network beyond that time. Noble Lords will recall the recent announcement that the Post Office Card Account will stay with the Post Office. We will now build on that decision to ensure a stable and sustainable network for the future.

We are determined to have a Post Office network offering a broad range of services throughout the country, supporting both social and financial inclusion. I am delighted that the House of Commons Business and Enterprise Select Committee has agreed to undertake an inquiry into what further services the Post Office could offer.

Conclusion

My Lords, I believe that Royal Mail and the postal market can thrive in the future – provided that decisive action is taken now. Without far-reaching change, the opportunities brought by technology will become overwhelming threats. This need not be the case. I believe that there are benefits for everybody in the package of measures that we intend to take forward.

• It will protect the universal service for consumers.

• It will give Royal Mail new opportunities to modernise and develop.

• It offers the Royal Mail’s staff a future in a modern, efficient postal operator with more secure pension arrangements.

• It offers the whole country a Royal Mail we can be proud of.

I commend this statement to the House.

Below is the text of the speech given on November 6th 2008 by Peter Mandelson.

Barack Obama’s victory is one of the most exciting moments of my political and public life. It is a once in a generation opportunity for progressive ideals and my kind of social democratic and internationalist politics.

When he comes to office, Mr Obama will face the challenges of war and climate change, as well as economic turmoil. He has been forthright on his policies in the first two and we look forward to working closely with him on the last.

In Britain I’m well known to be a strong pro European. But I’ve always been a strong pro American as well. I believe America at its best shares my – and European – values of democracy, personal freedom and opportunity for all. These values do not always equate to the right policies. But America has an extraordinary capacity to renew itself, to address its weaknesses, come to terms with its past and make change happen.

Most comment has focussed on the historic significance of the election of a black President for a society once so scarred by racial discrimination and prejudice – and the extraordinary signal this sends to people across the world about what America stands for. In recent years, there has been an evolution in American policy on a number of the important issues facing the world, so Mr Obama has a strong platform for launching a new drive for progressive world leadership. In my lifetime, I have not known a time when this leadership is more needed.

Because of this, there is also a great opportunity for Europe. We don’t compete. We need a partner, to work together to solve the global economic crisis, tackle climate change and meet the other pressing global challenges of poverty and development. The US and EU cannot, by themselves, make these happen. But we are indispensable to them being achieved. Only by the EU and US collaborating is there any chance of creating a stable and secure multilateral order.

However I want to underline three caveats:

First, in the global age Europe – and that includes Britain – cannot claim an exclusive relationship with an Obama Washington. The world has turned. To solve the global economic crisis, we have to bring in the new powerhouses of the world as equal partners. To tackle climate change we have to strike a deal with China and India. To sustain free trade and the beneficial forces of globalisation, we have to develop a new, progressive economics that embraces both the developed and emerging nations of the world.

Second, to be a credible partner, Europe has to step up to the table. We have shown leadership on climate change: we now have to deliver on our national commitments. In peace keeping and peace enforcement, we have to make the bigger contribution as European nations that I believe Barack Obama will expect. On trade and economics, we have to sustain an open Single Market at home and openness abroad. Half measures or half hearted ambivalence will not do. Because of the seriousness of the challenges we face, the demands on us are great.

Third, we need to work with Barack Obama to defeat those forces inside America that will try to hold him back. These include isolationists and protectionists and on Capitol Hill these forces are strongly featured in the Democratic Party itself – stronger still after some of Tuesday’s victories.

The only way forward for the United States and for the world is if America thinks globally. Yet more trade barriers, for example, are not the answer. Instead, the new Administration will have to defeat isolationists by developing a new progressive social model for the United States. This needs to emulate the best of Europe’s Social Model, helping working people more effectively through difficult economic adjustments, providing universal cost-effective healthcare and enabling youngsters to go to college whatever their family’s economic circumstance. These are policies that offer a mix of social opportunity and protection not to be confused with protectionism, the kind of progressive policies that Gordon Brown and I stand for, and we should explain and urge our Democrat friends and allies to adopt them.

This is the modern way – and the only way – to embrace the changes the world is undergoing, to sustain a progressive globalisation with social justice. Indeed politically, you cannot have the one without the other. For thirty years, globalisation was funded by western capital and structured to meet western demand. This is already changing. Last year, one in every six dollars of Foreign Direct Investment came from outside the developed world. China now ranks third in world goods trade with 12% of global exports and is fourth in world services trade with 5% of global exports. According to projections by Goldman Sachs, it is set to become the world’s largest economy, followed by the US and India, by 2050.

This shift, the biggest restructuring of the global economy since the industrial revolution, is increasing competition – and, therefore, generating huge economic and social pressures – at home and abroad. It’s intensifying demand for the world’s nature resources, a potentially huge competition which new trade rules need to govern.

As old economic certainties are eroded, countries and individuals are being challenged to find new ways to succeed. These new ways are not a race to the bottom as so many fear – on wages, regulations or anything else. They are about how most effectively to foster growth, not by reliance on financial engineering, but by genuine innovation and increases in productivity and through continued engagement with a global economy set to double in size during the next twenty five years. A global economy that since the early 1990s has helped over 400 million people from the developing world escape extreme poverty, and which through rising aspiration and a greater demand for high-value goods and services is a major source of prosperity in both the American and European economies.

That’s why it is self-interest for the US and EU to champion open markets and a multilateral system of trade and why this means supporting the Doha Round of trade negotiations. And I hope that when they meet next weekend, the G20 leaders will provide a strong signal of their commitment to intensifying negotiations and reaching agreement on the framework for a deal this year.

The early appointment of a US Trade Representative by the new administration, and engagement in the Doha negotiations would send a powerful message that, despite the changing world order – indeed because of it – countries can work together for their own, national and shared global interests. That’s what should bind Europe and the US, and what Britain should champion.

We want America to seize the opportunity of the Obama victory to reclaim its leadership role in the world. But Mr Obama will never succeed if Congress forces the new President into isolationism and protectionism, which forces America to turn in on itself.

Below is the text of the speech made by Peter Mandelson to the 1998 TUC Conference.

Thank you very much for that welcome. May I say that this is a very poignant moment for me indeed. I was one of the TUC’s brightest eyed young staffers when, 20 years ago to the month, I attended Congress. I will always be grateful to the TUC for the introduction it gave me to the world of trade unions, to practical politics, and to the values of systematic filing. Those were the days when I thought of John Monks as my boss. You can all take comfort from that. Old habits die very hard.

Then too another GMB General Secretary, the leader of my own union, was President of Congress, David Basnett, a man who had a similar reputation for choosing his words very carefully.

Then too there was a Labour Government and the Prime Minister came to address us, and you will be relieved to know that I am not going to take a trip down memory lane by trying to sing you a music hall ditty as he did, but those were times when you had to keep your spirits up.

In the mid 1970s an economic whirlwind of unprecedented ferocity had hit the world economy. The labour Movement faced that whirlwind with great fortitude and great solidarity. Inflationary collapse was averted. Unemployment began to fall. But, as the fatal winter that followed that Congress was to prove, Labour’s achievement was fragile. Tony Blair is determined that in the 1990s we will not repeat the mistakes of the 1970s. No one in this hall ‑‑ not you, not me ‑‑ will complain at that.

This Labour Government has good relations with the trade unions, but there is a key difference with 20 years ago. Those relations are now not too close for comfort. Today we have dialogue, good dialogue, but not under any duress. We should be able to agree and disagree without either being in hock to one another, or at risk of falling out — a mature practical relationship based on shared values and a shared agenda.

For example, we both believe that a workplace, based on mutual respect and minimum standards of protection, safety and consultation, is one which works better and more productively. That is why we have signed the Social Chapter, why we are introducing the national minimum wage, and why we are implementing the Working Time Directive without delay. It took a Labour Government to make these momentous changes, a New Labour Government.

The Fairness at Work legislation will be the central building block of this legislative package. This legislation will not turn the clock back to the days of strikes without ballots, flying pickets and mass actions. None of us want that; nobody is calling for that. What it will do is demonstrate that it is possible to have flexibility in the workplace, and to treat people well. Be under no illusion, these are controversial changes for which we still have to argue and win the case, particularly in light of the growing pressures on British business, but argue for it I will — for legislation that is seen by all to be fair and to be balanced if it is to win enduring support, as I am confident it will do.

To support this, to do this, I can think of no better ally than Ian McCartney to help me take this Bill through Parliament. You all know Ian McCartney very well. When I arrived at the DTi I will admit to being a little worried about Fairness at Work and I called Ian in to talk about it. I said “Ian, you know, it is a tall order this Bill” and he said “Don’t worry, Peter, I will make short shrift of the critics”. This reassured me enormously. This Bill will strengthen partnership at work. In today’s economy partnership is key to competitive strength. Britain is in a non‑stop race to boost that strength, to create comparative advantage, to add value ‑‑ all against the background of our current economic difficulties.

I understand the concerns that are being expressed about the level of the pound. We are all well aware of how tough life is out there, particularly for manufacturing industry and for exporters. Nonetheless, John Prescott was right on Monday to say that we should not talk ourselves into recession. Employment is not going down. The economy has generated over 400,000 jobs since Labour came into office. The Government’s policy for Britain is clear: a strategy for stability amidst instability in an uncertain world; a commitment to end once and for all the dismal record of stop‑go, and of boom and bust, the roller coaster of economic activity that has so damaged confidence and investment in the British economy over the past two decades.

This is why we have taken the politics out of interest rates by vesting authority in Eddie George and his colleagues at the Bank of England. That is why Gordon Brown has taken the necessary tough action to clear the Tories overdraft and to put the public finances back on track. Gordon’s is not an enviable job. He puts the interests of the country before those of any pressure group. He has the honesty to say “no” when others are tempted to let it be known that they might have said “yes”. I fervently believe that we will reap the benefits of the tough but wise decisions he and the Government have taken.

Nobody is saying it will be easy; it won’t. Asia, Japan, Russia, Latin America, jitters on Wall Street, collapse of the real economy in Indonesia — we face constant reminders that we live in a global economy. What effects one country affects us all. There is no magic fix of Government intervention or extra money that can solve these problems.

That is why economic cooperation between countries has never been more important than now and why we must strengthen Britain’s position in Europe, now our natural home market. On Europe the people who threaten to cut Britain off from this home market are the leaders of today’s Tory Party with their head in the sand policy on the single currency.

Congress, in yesterday’s debate you proved yourselves far more sensible than them. On this issue, Government, business and unions are at one and we are working in partnership in Europe. Now, at the DTi I know that John Monks believes that my new role is actually the first real job I have had since leaving Congress House. I would not go that far but the job is certainly a real challenge. Some have scoffed that under the Tories the DTi was the Department of Timidity and Inaction. Under my leadership I can tell you, no more. My mission at the DTi is to use all the tools at our disposal to strengthen industry, enhance business performance and to create an environment in which enterprise flourishes.

Britain can do better — much, much better. As a nation we have a world class science base. We have talent and creativity galore. What we lack are the entrepreneurs to turn these natural strengths into products and services that customers want. We must overcome these weaknesses. For unless we do, Britain will never succeed in exploiting the potential of the knowledge based economy of the future. In that knowledge based economy scientific discovery and technical progress will reach more directly and much more swiftly into every aspect of our lives. The key to competitive success will lie in the exploitation of knowledge for commercially profitable ends, as much in manufacturing as in services. In the knowledge-based economy, the increasing reality of liberalised markets and open trade will destroy the tradition sources of competitive advantage. Once that stemmed solely from the skills and techniques of production. Now it depends much more on the creativity that surrounds it; the know how that dreams up new ideas; the innovation that brings forward new products and the marketing that builds new brands.

In this new world, Britain has a simple choice. To move with the times or be swept away by them. My clear view is that we must make change our friend, not our enemy. That is how in simple terms I define the mission of my department. It is a task in which I want your full support; because together we can put the future on Britain’s side.

But I know many of you in this hall will have an even bigger question at the back of your minds. “Where do you think, Peter, the trades unions fit into your bright, knowledge-based vision of the future? I can be very clear where I stand. I believe in trades unions, not just for reasons of sentiment – though when your first job opportunity was working for the unions, that sentiment is real enough – not just either because I will always remember how the trades unions helped Neil Kinnock save the Labour Party in the 1980s, just as in my grandfather’s time the trades unions saw the Party through the upheavals of the 1930s.

No, it is much more than sentiment. For millions of people, trades unions are both relevant and necessary in today’s world. The relationship between employer and employee is by its nature a fundamentally unequal one, one that the unscrupulous employer can exploit.

We all know that individuals at work still need the protection of trades unions against the arbitrary abuse of management power. We all know that a good relationship between trades union representatives and an employer can help to promote flexibility and productivity at work. Yes, I believe in trades unions. It is precisely because of that belief that you will always get from me honest, straight talking and candour. No grandstanding, no playing to the gallery, no more spin, honest.

Let me set out my vision of the role in society which I sincerely believe the unions can and should play.

Friends, a new economic future is beckoning for us in this country. For industry, it means adaptability, willingness to change, flexibility of working and a constant drive to modernise. If the trade unions want to be part of that future, then it means the same thing for you. In the 1980s the debate raged about whether the trades union were too strong or too weak. For some, that is still the dividing line. That is not a choice I accept, or one that the Government accept. For us the choice is between modern trades unions and those which are frozen in time, between effective trades unions and ineffective ones. I want to see modern unions working with successful companies in shaping Britain’s future.

I recognise that the trades unions have already made huge efforts over the years to change and modernise. Modernisation through the New Unionism project and the Organising Academy which is bringing a modern, business-like approach to the unglamorous but vital role of recruiting new members. I recognise that in many companies industrial relations have been transformed from the old-style battlefield of “them and us” to the new-style of co-operation in achieving shared success – shared success.

Good managers and good trades unionists have been responsible for that transformation. They need each other. But that modernisation and transformation must go further still. Indeed, if my analysis is right, it is never ending. I realise that this is not an entirely welcome message in a hall where in the past two decades so much painful change has had to be swallowed by so many. I know that to some of you I am seen as a non-stop moderniser, hell bent on change at any cost. I make no apology. I passionately believe that modernisation is essential in the trades unions’ own interest.

I saw some staggering statistics the other day. Only 6% of young employees are members of trade unions; only 18% of employees under the age of 30. The density of trades union membership is lowest in the fastest growing sectors of the economy. Of course I accept that there are rogue employers who actively discourage trade union membership, but for too many people trade unions appear only marginally relevant.

Many companies have built honest and credible partnerships with their employees with no involvement by trade unions at all. And if employers and employees are content with that, it is not the job of government to order them otherwise. Of course, it is not. As trade unions you can make the difference yourselves. To meet fully the challenge of modernisation, I suggest that you need to focus on three key areas.

You need to focus on delivering quality services to your members; helping achieve employers’ success and being seen as responsible to the general public.

First, delivery on behalf of your members. You are absolutely right to have put the emphasis back on what your members really care about – protection against arbitrary management behaviour or discrimination; fair levels of pay; safe working conditions; a pension to look forward to and the other essentials of decent conditions of employment. If together the trade unions and the Labour Party learnt one lesson from the 1970s and the 1980s it was the imperative to respond to the needs of individual members, not a vocal minority.

Trades unions cannot rely, and should not, on governments to deliver them a bigger membership. Unions have to win their position by demonstrating their value to members and potential members, but the Government do have some role in helping unions to represent their members in the most effective and most constructive way.

For example, in the Fairness at Work White Paper we said we intended to set up a Partnership fund to promote best practice in employee relations and their involvement.

You will be pleased to hear that I can today confirm that we are going to establish such a fund. Money will be made available for a series of projects to give employers and employee representatives a much better understanding of the challenges each face and what can be achieved by working together as companies like Tesco, Boots, Unisys, Blue Circle and European Gas Turbine are doing.

Working in partnership with employers brings me on to my second point: the need to focus on employer success. No union benefits from harming the companies its members work for. In the private sector that means actively working for and welcoming profits. In the public sector it means delivering ever better services of higher quality.

By the way, contrary to what you have read in the newspapers, no decisions have been taken to privatise the Post Office.

Congress, success in the public or private sector means awareness of labour costs. No one now deceives themselves that we can compete on costs regardless of quality. So no one should deceive themselves that we can compete on quality regardless of cost. It means sharing in the company’s success but also showing moderation in wage demands and flexibility in pay levels in times of economic difficulty. I say this every bit as much to company boards and to their directors as I do to trades unionists. By all means enjoy the rewards of success in the good times, but make sure those rewards are merited and make sure you are willing to share pain in the bad times, too.

The third test is being seen to be responsible to the public. I believe that unions have an important role which extends beyond the workplace. Trades unions are a force for good in our society in setting workplace minimum standards; in ensuring adequate health and safety; in promoting training and skills and in pressing for proper provision of pensions and other benefits.

Any responsible Government should always listen to what the trades unions have to say in these areas for they are unique in their ability to bring to the consideration of public policy the voice of direct workplace experience. The Government want to work with you in all these areas. We did on the National Minimum Wage. We have done so through the Skills Taskforce. We are doing so on the Competitiveness White Paper, and we shall do so in the development of the stake holder pension. I want to work with the trades unions.

But the extent to which the unions have a voice that carries influence and respect will always depend on the credibility and persuasiveness that unions themselves can command. That means co-operating in the modernisation of public services. It means working with us in forging other reforms, in the welfare system, in the schools and higher education, in de-centralising government. Above all, it means not attempting to veto change but embracing it and helping to manage it in the interests of all.

Tony Blair’s Government will never be a soft touch. We will do our duty whatever. We will never again contract out the governance of Britain to anyone, not to the TUC or its member unions, any more than we would to big corporate interests either.

As far as my Department is concerned, there is not a front door for some and a back door for others. There is one door for all – and it is always open.

Congress, the choice is yours – opposition or legitimate influence. I know my preference: it is for trade unions that draw increased strength from being modern, democratic, representative and influential, that day in and day out prove their relevance to their members, that match realism with responsibility in their dealings with employers and government. I believe that in working together in this way, we will not only generate respect for each other but that the unions will succeed in reinvigorating the public esteem they merit.

Take it from me. I know a little bit about public relations and improving images. So much so that one of these days I might even be able to do something about my own. But I am told that it will probably take me more than 48 hours in a week to do so.

Imagine depends on substance. Public relations will not succeed unless there is something real behind it. Trades unions do have the basis of such genuine appeal; a believe in social justice, an understanding of the real world, an ability to get to grips with practical workplace issues, a commitment to democratic methods and a willingness to co-operate.

That is not just a platform, it is a springboard for the trades unions. In leaping ahead to the new unionism demanded by economic change and by your own members, I can assure you that you will have my backing and that of the department I head.

I have battled for years for an electable Labour party. I am now battling for a successful country, strong in services and manufacturing, generous at home and abroad, with acclaimed public services and a dynamic private sector.

Congress, join me, please, in the battle for success.

Thank you very much.