RM buyer will maintain universal service, minister insists

[POSTMAN]

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The UK government has insisted that any sale of Royal Mail will leave the country’s universal service obligation intact – and protected by law.

The assurance came from Baroness Wilcox, the government’s junior business minister in the House of Lords, as the upper House debated legislation seeking to privatise the national postal operator.

Facing an array of concerns from opposition peers that the Postal Services Bill will open the door to asset strippers or cherry pickers from the private sector, the minister said regulator Ofcom would have the power to protect the universal service provision.

She said: “Ofcom will be watching like a hawk to make sure that there is a fair balance between Royal Mail and the consumers of the products that Royal Mail produces.”

The Royal Mail, currently a limited company owned by the government, would still have the obligation to provide mail deliveries six days a week across the entire country for a uniform tariff under the government’s proposals for private ownership.

The debate last night - the committee stage in the Lords for the Postal Services Bill, which has already passed through the House of Commons - saw concern among peers that selling off the Royal Mail could see new owners pricing their universal service out of the market to make it unattractive to consumers.

But the Baroness said the universal obligation was protected by Parliament under the terms of the Bill, and that Ofcom would ensure the minimum requirements of the obligation were upheld.

“As we know, the minimum requirements are above those set out in the European postal services directive in terms of the requirement to deliver letters six days a week and for a uniform tariff and service to apply,” she said.

In the “unlikely event” that the new owners no longer wished to provide universal service coverage, the minister said regulator Ofcom would have the powers to force Royal Mail to deliver on the obligation.

“Ofcom will also have the power to impose penalties on companies found in breach of the regulatory conditions,” the Baroness warned.

During the debate, peers expressed concern that the government would not report on the full value of Royal Mail and details of acquisition proposals before the sale is completed.

Peers including Lord Clarke of Hampstead, a former postman and postal trade unionist, warned that without detailing the scope of Royal Mail’s assets, the sale could be under-valued.

“A kind of Jurassic Park”

But the particular concern was that a sale would leave new owners skimping on their obligation to cover the final mile in all corners of the country.

The peers highlighted comments made last year at the European Postal Services conference in Brussels by Pieter Kunz, managing director of TNT, a company seen as among the favourites to buy Royal Mail. Kunz had said last spring that the universal service obligation was “a kind of Jurassic Park and we should get rid of it”.

Last night, Lord Clarke said: “If we rush into a sale and Royal Mail ends up in the hands of a particular private company, we shall know what to expect, because that company has already said that the universal service obligation belongs to Jurassic history. It even questioned whether there should be six deliveries a week. We have to be very careful.”

Lord Clarke said a number of European countries had now moved from having state-owned postal operators to 100% privatisation, and that in some of those countries the privatized operations are not required to deliver a universal service.

“My worry is that we could find ourselves in a position where a foreign buyer might already be in the business in a country that no longer has a universal service and that might decide in due course that it will no longer maintain a universal service in this country. That would be very bad indeed for Britain,” he said.

[Wiggins79]

Let me make a little predicition: private buyer gets hold of RM happily claiming they will uphold the USO and besides, the govt says they have to, honest guv. A year down the line private buyer runs cap in hand to the govt "Oh, woe is me. Mail has continued to drop and everybody is using email and iphone to contact each other and parcels are being sent by magical fairies who fly through the air and we can't afford the USO any more." Govt: "but we made you promise you'd stick to the USO. Don't make us out to be liars- which we clearly aren't. No sir." Private buyer: "But the EU says we don't have to have a USO, and we all now take orders from Brussels and you can't do anything legally about it seeing as you willingly signed us all up for it. So screw you and your USO, we'll do whatever the hell we like. 3 deliveries a week. Sack half the staff, and replace the remainder with part-time students, immigrants and stay-at-home mums." Govt: "Blimey, we never saw that coming (except of course we did, and we told private buyers all about it, as long as they promised not to let on to the public)." The End.

[viking]

Let me make a little predicition: private buyer gets hold of RM happily claiming they will uphold the USO and besides, the govt says they have to, honest guv. A year down the line private buyer runs cap in hand to the govt "Oh, woe is me. Mail has continued to drop and everybody is using email and iphone to contact each other and parcels are being sent by magical fairies who fly through the air and we can't afford the USO any more." Govt: "but we made you promise you'd stick to the USO. Don't make us out to be liars- which we clearly aren't. No sir." Private buyer: "But the EU says we don't have to have a USO, and we all now take orders from Brussels and you can't do anything legally about it seeing as you willingly signed us all up for it. So screw you and your USO, we'll do whatever the hell we like. 3 deliveries a week. Sack half the staff, and replace the remainder with part-time students, immigrants and stay-at-home mums." Govt: "Blimey, we never saw that coming (except of course we did, and we told private buyers all about it, as long as they promised not to let on to the public)." The End.

[fishtank]

Anyone who says that a private company will continue to support a loss-making USO is either a liar or has been eating way too many of the kind of cookies you can buy in an Amsterdam coffee shop.
Has Baroness Wilcox been to Amsterdam lately....or is she just a liar?

[DirtyHarry]

Oh, come on, baroness what'syourname, I know, you know, we all know, that once Royal Mail has finally ceased pretending it's a public service, the USO will be well and truly fooked, might take a year or two, but it will cease to exist.
Only one thing will truly guarantee the USO, being in public ownership, nothing more, nothing less.

[DirtyHarry]

Anyone who says that a private company will continue to support a loss-making USO is either a liar or has been eating way too many of the kind of cookies you can buy in an Amsterdam coffee shop.
Has Baroness Wilcox been to Amsterdam lately....or is she just a liar?

She's a liar, and she knows it.

[Wiggins79]

Let's face, they will say anything as long as they get their greedy mitts on the pension pot.

[oypostie]

So if the universal service is safe why are they already consulting on removing bulk mail from it

[barbario]

Spot on Wiggins 79.Whoever does buy us will surely have this in mind ,to use European rules as a way around the USO obligation. The Government will say whatever lie's it can to get this bill through.

[Wessex]

It is laughable that this woman can make her claims.Postcomm which is to be subsumed into Ofcom failed spectacularly to protect the USO . in fact it almost brought, via DSA ,our postal system to its knees.My own view is that DSA was used to hasten privatisation but those that encouraged it did not anticipate how long the process would take.

[ziko]

It is laughable that this woman can make her claims.Postcomm which is to be subsumed into Ofcom failed spectacularly to protect the USO . in fact it almost brought, via DSA ,our postal system to its knees.My own view is that DSA was used to hasten privatisation but those that encouraged it did not anticipate how long the process would take.

Spot on

[Darren Bent]

I would double the price for USO post cost then it will gradually cut down :)