MPs cast doubt on protections for UK’s universal postal serv

[TrueBlueTerrier]

MPs cast doubt on protections for UK’s universal postal service

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Opposition MPs in Parliament warned last night that the UK government has indicated no plan B for the universal postal service if “everything goes wrong” with Royal Mail’s privatisation.

Pointing to the failures of nationalisation in Britain’s railway system, and in particular where the East Coast franchise was handed back into state ownership, Labour’s shadow minister for postal affairs Ian Murray suggested that a privatised Royal Mail would look to sell the most expensive parts of its business, including rural operations.

“Neither the Minister nor the Royal Mail can tell us what will happen if everything goes wrong,” said the MP for Edinburgh South.

“If the universal service obligation becomes too expensive to deliver or if the privatised Royal Mail just hands back the keys to the Government, as the private companies did when their contracts failed on the east coast rail line, what will happen? The taxpayer will pick up the tab.”


Shadow postal affairs minister Ian Murray said the taxpayer would have to step in if Royal Mail’s privatisation “goes wrong”
The warning came as MPs were debating the future of rural postal services yesterday in the House of Commons.

Postal affairs minister Jo Swinson insisted that the 2011 Postal Services Act would protect the provision of the universal service including six-day-a-week delivery to every home in Britain, along with a uniform “affordable” tariff.

“It is up to Parliament to defend that universal service. That lies in Parliament’s power. We have protections in place through the 2011 Act because the Government recognised that that is an important service,” she said, stressing that ownership change could not change the power of Parliament to oversee the universal service.

However, opposition MPs pointed to the recent deregulation of Royal Mail’s pricing controls as testament to the ability of Ofcom to change the nature of Royal Mail’s service obligations.

“I appreciate the fact that the Government say that the universal service obligation is enshrined in law, but that covers only the bare minimum. Many of the requirements are set by Ofcom and can easily be changed,” said Katy Clark, the North Ayrshire and Arran MP who secured yesterday’s debate.

“I do not believe that the protections that we have been offered are adequate, so I am asking the Government to halt the sale of Royal Mail to give proper consideration to how rural services can be provided in the longer term, and to put in place stronger legal protections for the universal service obligation.”

“Unchecked”

Mike Weir, the SNP MP for Angus who secured the debate along with Clark, said he had received a letter from regulator Ofcom confirming that does not have the powers to prevent Royal Mail introducing zonal pricing.

“That is the problem. Ofcom cannot prevent Royal Mail from introducing a price rise now, never mind if it were to fall into the hands of a private operator,” he said.

During the debate, Labour MPs criticised the ability for private operators like TNT Post UK to “cherry pick” the most profitable delivery routes, leaving Royal Mail to run only the less lucrative rural areas. This would leave a more expensive universal service – and more motivation for a privatised Royal Mail to reduce rural services, the MPs claimed.

“Such unchecked competition places the current universal service under significant threat,” said former minister Peter Hain MP, who demanded that Royal Mail’s rivals be made to deliver to the entire UK, or pay into a universal service compensation fund, in order to help give a level playing-field to Royal Mail.

The 10-year partnership agreement between Royal Mail and Post Office Ltd also came in for criticism, with Clark among those stating the “inadequate” contract did not provide sufficient protection for post office operators.

Clark said the agreement was simply not long enough. “There is no guarantee that the inter-business agreement that has been entered into between Royal Mail and the Post Office will continue or remain unchanged at the end of the 10-year period,” she said.

Source: Post&Parcel/UK Parliament

[UnhappyGremlin]

We've all been saying this for ages.
About time it was brought up in parliament.