Introducing competition
EUROPEAN POSTAL SERVICES CONFERENCE
BRUSSELS 13–14 MARCH 2001
INTRODUCING COMPETITION
GRAHAM CORBETT
CHAIRMAN POSTAL SERVICES COMMISSION UK (POSTCOMM)
Slide 1. Introduction …
Thank you for giving me this very timely opportunity to talk to you about Postcomm’s approach to introducing competition – timely because the end of this month – the 26th March to be precise – marks the moment when the UK Post Office or Consignia will no longer hold a statutory monopoly of the postal market and will require a licence from Postcomm to operate within a licensed area.
I am doubly glad to be joined here this morning by two speakers prominently involved in the development of the UK postal market – Alan Johnson MP and Derek Hodgson.
None of us in this room will have any doubt as to the importance of postal services to our economies. Where we may differ is in how we encourage them to be more responsive, more innovative, more efficient. What I want to do this morning is to explore how the introduction of competition can contribute to this end, and hopefully to stimulate your views.
The challenge for Postcomm is to encourage competition in the market in a way that will enhance the range and quality of services offered to postal users, thereby contributing more generally to the UK’s competitiveness – and to do that while preserving the universal service.
But before I set out for you the approach that Postcomm is taking to the introduction of competition, let me to tell you a bit about ourselves and give you a brief overview of our role and responsibilities.
Slide 2. About Postcomm …
Postcomm only acquired its legislative teeth in November of last year. It is steered by a group of 7 commissioners of which I am the part-time Chairman. The Chief Executive is full time – the other five Commissioners are much more part-time than me. We come from a wide range of backgrounds, which is already contributing to the quality and depth of our decision-making.
It is critical to understand that we were appointed to act as an independent regulator of postal services – which means independent both of postal operators and of Government intervention. Our job is to apply the provisions of the Act of Parliament by which we were created:
Slide 3. Postcomm’s roles …
To protect customer interests by, among other things, maintaining the universal service provision;
To control the prices the Post Office can charge and ensure it provides an efficient service, and;
To promote competition to the extent that it does not jeopardize the universal service nor prevent the Post Office from being able to finance its activities.
The Government has also asked Postcomm to monitor the size and shape of the postal network (the term used to describe the local post offices) and to report our findings. However this function lies outside our regulatory duties and we have no powers to prevent individual post office closures.
Slide 4. End of the Post Office monopoly …
As I said at the outset, the Postal Services Act ends the UK Post Office’s statutory monopoly later this month and allows other competitors to enter any part of the postal market if they are granted a licence to do so by Postcomm.
We must therefore be ready to encourage competition in the market in a way that will deliver benefits to postal users while preserving the universal service.
Slide 5. UK and EU: the difference …
If you were listening carefully to all of that you may have picked up on one crucial difference between the UK situation and that in many other EU countries. In most member states the ‘reserved area’ (which in most countries means below 350 grams) remains a monopoly reserved to the sole universal service provider – generally under State ownership.
In the UK, by contrast, the whole market is now open subject to Postcomm’s licensing
