Universal Postal Service

Albert Owen Excerpts

Thursday 17th July 2014 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

It is an honour to follow the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith), a fellow member of the Energy and Climate Change Committee, who spoke in a very measured way. He is right that competition started some time ago, but we are now in a very difficult position.

I want to pay tribute to postal workers for their excellent work in providing services throughout the year in very difficult circumstances and weather. There has been great modernisation in postal services—within the Post Office or Royal Mail—and things have got better, but we now need to deal with the issue of unfair competition.

You would rule me out of order, Madam Deputy Speaker, if I went on about the privatisation of Royal Mail, but that privatisation has set a very dangerous precedent, and issues have arisen from other privatisations. Market forces have served rural Britain badly and, for areas such as mine on the periphery, there is the double whammy of being rural and peripheral. We must do something about that, and I will come on to talk about a model that would fit and would improve the situation: the introduction of a not-for-profit model, stopping short of full nationalisation, is the way forward.

When privatisation went through, concerns were expressed in this House about the universal obligation, and such issues have been raised in the past. Let us be honest, however, that companies will never come to north-west Wales and say that they will deliver the service for the same price as they would in Chester, Liverpool or Manchester. That just does not happen. Our current delivery service on five days a week for parcels and six days a week for letters will not exist in the future. That is the reality when services are opened up to the market.

We have seen that in other privatised utilities, such as British Telecom. The hon. Member for West Aberdeenshire and Kincardine said that lighthouses are exempt, but under the old Post Office those in my constituency had a telephone line, just like buildings in the towns and cities of England, Wales, Scotland and Northern Ireland. They had the same service, with the same infrastructure and pricing, as the rest of the country.

That was when the Post Office was an iconic brand, as Royal Mail is today, and provided a universal service. Following privatisation, however, such areas do not get the same full broadband, or the services and maintenance, but they pay the same price. Mobile phone coverage is patchy across rural areas of the United Kingdom. In my area, we are lucky to get 3G or even 2G, let alone 4G. That is the reality in many parts of the United Kingdom when services are opened up to the market. The pricing is the same— I pay the same for my mobile phone contract as somebody in central London—but people do not get the same service and back-up, which is the danger in such a free market.

There is a way forward. Water was privatised, and Welsh Water has become a not-for-profit organisation, with the profits being ploughed back into the company to improve the service. The service, including the quality of water, is the same across the whole of rural and urban Wales, because the profits are reinvested. There is competition within the system—the company has to comply with European directives on liberalisation—on tendering, and that might work in the postal service. I must say that when my party was in government and intended to make such a change, it did not consider these models. It should have analysed not-for-profit models, because they provide not only a universal service, but a mechanism for competition. Tendering for contracts has to be done under EU regulations so that many people can benefit from such competition. At the end of the day, the customer pays the company and gets a service that is universal across the whole of Wales.

We should look at the iconic brand of the Royal Mail in the same way as water, which has a proven model that will work for the future. I want my constituents and people across rural Britain to enjoy the same standard of service and the same costs, because that is very important in this day and age. Yes, Royal Mail needs to modernise, as it has, but it also needs to keep what I think is the best of British, which is the universal service it provides under the service obligation.

I thank my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) for securing this debate. It is worth putting on the record that there is a way forward. Competition is not the answer: the market has failed in many areas, and it will not serve people on the periphery or in rural areas of the United Kingdom to continue down the road of opening to competition areas that will be cherry-picked by companies only for profits. We want a universal service across the United Kingdom. We will have to fight for that, and we must put in place a model that will deliver it.