Debate: Postal Services Bill - 14th Mar 2011 - Lord Lea of Crondall extracts

Postal Services Bill Debate

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Lord Lea of Crondall

Main Page: Lord Lea of Crondall (Non-affiliated - Life peer)

Postal Services Bill

Lord Lea of Crondall Excerpts
Monday 14th March 2011

(13 years, 9 months ago)

Lords Chamber
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Lord Swinfen Portrait Lord Swinfen
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Apart from Royal Mail, there are a number of other providers of postal services, none of which produces a universal postal service. They all rely on Royal Mail to deliver the last mile, particularly in remote areas. We need something in the Bill, and I would like the Minister to tell the House how a universal postal service will be ensured by someone taking over Royal Mail. If she cannot, she must bring something forward on Report to ensure that. Otherwise, this Bill is not satisfactory.

Lord Lea of Crondall Portrait Lord Lea of Crondall
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My Lords, unless I have read this Bill wrong, Clauses 28 and 29 leave no doubts about the universal postal service. I shall put the question to the Minister the other way round. We are not debating these clauses now, but because the point has been raised it is worth looking at them. Can we take it that they mean what they say?

Viscount Eccles Portrait Viscount Eccles
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My Lords, the Postal Services Act 2000 “liberalised” the postal service. There are now, I think, 49 licensed postal operators in addition to Royal Mail, which is also licensed. If that number of people were willing to become postal operators, they must have expected it to be possible to do that successfully. As the noble Lord, Lord Lea, said, the Bill quite clearly states that there has to be a universal service, so whoever buys Royal Mail in whole or in part, wherever they come from, would not be acting in accordance with the law if they did not maintain a universal postal service. That is not really the problem. The difficulty we are in is that we have had an inappropriate regulation system in which the regulator tended to believe that competition was more important than the universal service and acted accordingly.

The problem with the universal service is that it is a monopoly. As noble Lords will have seen from the lobbying that they have had, it has been said that it will become a privatised monopoly. However, it is not a natural monopoly but a completely artificial one. It is not like a railway line or a water pipe. In my part of England, the so-called final mile is absolutely nothing like a final mile but a final 10 miles. It is running about on the roads, which are a public asset and nothing to do with the assets of Royal Mail or the Post Office. There has been confused thinking about whether the so-called final mile is an advantage or a disadvantage. The private operators are trying to tell us in this House that it is an advantage, an asset that enables people to charge monopoly prices. In fact, that is not what has happened. It has been entirely the reverse. The final mile is a disadvantage to Royal Mail. Therefore, in the progress of this Bill, we should concentrate more on regulation and the prospective system of Ofcom than upon anything else.