Northern Island Assembly - Postal Charges Private Members'

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Postal Charges
Private Members' Business

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Roy Beggs (UUP)
The Business Committee has agreed to allow up to one hour and 30 minutes for the debate. The proposer of the motion will have 10 minutes to propose and 10 minutes in which to make a winding-up speech. One amendment has been selected and is published on the Marshalled List. The proposer will have 10 minutes to propose the amendment and five minutes in which to make a winding-up speech. All other Members who wish to speak will have five minutes.


Phil Flanagan (Sinn Féin)

I beg to move

That this Assembly expresses concern at the continuing existence of barriers to greater North/South economic development; fully recognises the importance of a reliable, affordable and effective postal delivery service, particularly to micro and small businesses; further recognises the findings in the recent Ofcom communications market report whereby 47% of people questioned felt that the current costs of posting a letter across the border represented poor value for money; further expresses concern at the significant additional cost differential and time delay to deliver post intended for across the border; calls for all companies and agencies involved in postal delivery to introduce a single pricing structure for mail being delivered anywhere on the island of Ireland; and further calls for the Minister of Enterprise, Trade and Investment to raise this matter at a forthcoming meeting of the North/South Ministerial Council (NSMC) when it meets in trade and business sectoral format and to use the NSMC to exert maximum pressure on the above companies and agencies.

Go raibh maith agat, a LeasCheann Comhairle. As we all know and have acknowledged on many occasions in the Chamber, the border presents a serious barrier to economic development on the island of Ireland. Some problems are quite challenging; some are quite complex; and some are quite ridiculous. The issue that we are debating today certainly falls into the latter category. The fact that it costs more to post a standard letter from Belcoo to Blacklion, a mere stone's throw apart, than it does to post the same letter to anywhere on the island of Britain or any of its offshore islands, makes absolutely no sense on any level. In fact, you could nearly crumple up one of those pieces of paper, make it into a paper aeroplane and throw it some of the distances in question. However, that situation is not reflected in the price and standard of cross-border postal services.

What makes things worse is that there is often a considerable delay in such items being received by the intended recipient, sometimes up to three days after it should be there. This is because, for some unknown reason, post destined for the rest of Ireland has to go on a round trip to Britain for sorting. Such a situation is just not good enough. We should not tolerate it, and we must challenge those involved in the postal sector to do much better. The policies that they put in place must reflect the particular circumstances of this island, which are being ignored by the current reality. The barrier that is the border makes no sense at all in respect of postal services.

For me, the most important part of the substantive motion is the call for a single pricing structure for mail being delivered anywhere on the island of Ireland. If An Post can offer a single pricing structure for the whole of Ireland, why can the same not be asked of all postal companies in the North? It could be done quite easily if they wanted. There are no legislative or practical impediments to such a policy decision. If it could be put in place, the only things that it would have to comply with would be the universal service obligation and the standard pricing structure for post going anywhere in Britain or anywhere in the North.

However, this debate is not primarily about postal charges; it is about the people and the organisations that rely on this vital service. I do not expect people who live in or never leave north Down to have the same appreciation of the impact of the border as the people who are faced with the adverse impact of the border on a daily basis. However, consider a couple who are planning a wedding. My brother and his fiancée are in this position. Many couples organising a wedding, particularly in border areas and when one of the two comes from the other side of the border, will have to send a considerable number of the invitations to the South. Faced with that situation, many people actually travel across the border to post the items to save on costs. The same challenges that face individuals also face businesses and countless organisations that are attempting to do business with people and groups on both sides of the border.
I raise this issue not merely to point up a problem that has existed for an awful long time but to identify a solution. We have to be honest about what is going on here. There are some in our society who are determined to exploit the border and rip customers off by imposing an unwarranted and unwanted tax on cross-border transactions. There are then those who are making the most of the opportunity to undercut the extortionate prices charged by the monopoly providers.

I think of the good work being done by Hybrid Mail in Fermanagh, which is run by Colum Courtney, who recently appeared on RTÉ's 'Dragon's Den'. I know that the Minister of Enterprise, Trade and Investment visited Colum two years ago. Organisations such as Colum's can provide a significant saving to customers using cross-border postal services.

Many reports and research exercises have identified the disproportionate cost of posting items across the border as a significant problem over recent years. In the 'Study of Obstacles to Mobility', which was carried out by PricewaterhouseCoopers for the North/South Ministerial Council (NSMC) and published in November 2001, the issue of cross-border postal services was identified as a problem for businesses, organisations and individuals involved in activities on both sides of the border. The issue of cross-border postal services was again discussed at the North/South Ministerial Council plenary meeting on 21 January 2011 following the publication of InterTradeIreland's quarterly business monitor in 2010, which revealed that 27% of businesses using cross-border post were dissatisfied with the cost of it. I am unsure what progress, if any, was made at this time. I believe that a paper was taken to the NSMC institutional meeting in October 2011. I had hoped that the Minister may have indicated what progress has been made, but there is nobody here, so I doubt we are going to hear about that progress.

I am grateful to Ofcom, which recently asked respondents to its annual communications market report for their satisfaction rating with cross-border postal services. Some people were surprised by the findings. I, for one, was not, as I speak on a daily basis to people who are afflicted by such nonsensical policies. Forty-seven per cent of adults surveyed by Ofcom indicated that the price of 87p to post a standard letter from one part of this island to the other was not value for money. Since that survey took place, the price of a stamp has risen by a further 10p, so I do not think that public opinion will have improved much. The Consumer Council and, indeed, its predecessor, Consumer Focus Post, have taken an active interest in this subject matter and attempted to reflect the views of consumers by seeking a solution.

They have committed itself to exploring the issue in the coming year, and I look forward to that work. The all-party group on postal services, of which I am a member, has also agreed to look into it this year.
In conclusion, this problem needs to be sorted out. It is one of the simpler problems that we have looked at in the Assembly. I believe that, if the political will exists to exert pressure on those involved in this exercise in extortion, a solution can be found. The motion is only the first step, and a clear message needs to be sent out that the current situation is unacceptable and must change. The issue needs to be grasped at the North/South Ministerial Council. I am disappointed that there is no Minister here to respond to the debate. The issue clearly needs political and ministerial intervention to be resolved. I appeal to Members to support the motion.


Patsy McGlone (Social Democratic and Labour Party)
I beg to move the following amendment:
Leave out all after "small businesses;" and insert:
"expresses concern at the threat to the viability of rural post offices that direct delivery competition presents and the significant additional cost differential and time delay to deliver cross-border mail; and calls on the Minister of Enterprise, Trade and Investment to assist businesses by working in conjunction with her North/South Ministerial Council colleagues and her counterparts in the Westminster Government to ensure the long-term viability of a universal postal service that incorporates a value-for-money cross-border service."

Go raibh maith agat, a LeasCheann Comhairle. Mo bhuíochas leis an Chomhalta Philip Flanagan as ucht an rún a chur os ár gcomhair. I thank Mr Philip Flanagan for bringing the motion before us today. The issue is rather more than just the motion, and that is why I am grateful that the amendment was accepted. I welcome the motion, although I have to say that, of all the barriers to greater North/South economic development, the cost of posting a letter across the border appears to be one of the lesser obstacles to be overturned. Nevertheless, Mr Flanagan and his party have decided that the Assembly should focus on that issue today.

It is certainly true that the significant additional cost differential and time delay in delivering cross-border mail is a hindrance to business, particularly micro and small businesses, as well as a constant source of irritation to the public. However, the original motion may be somewhat flawed in that it engages in the politics of appealing to the better nature of all companies and agencies involved in postal delivery to introduce a single pricing structure for mail being delivered anywhere on the island of Ireland. What if they do not? Apparently the North/South Ministerial Council should "exert maximum pressure" on those companies to comply with the edict. At some stage during the debate, which is an important one, we will perhaps hear what pressure people think should be imposed on those companies and what the Ministerial Council can actually exert on them.

The postal delivery service across Britain and Ireland is regulated by legislation set in London and Dublin. That is where the long-term viability of a universal postal service will be secured and where our efforts need to be focused — on a north, south, east and west universal postal service. The original motion would, in effect, break the existing universal postal charge that applies in the UK and the North, and our local businesses could suffer as a consequence. Indeed, the motion fails to acknowledge that there is already a threat to the existing universal postal charge here.

Our amendment seeks a meaningful debate on addressing the very real threat to the viability of our rural post offices, as well as addressing the significant additional cost differential and time delay in delivering cross-border mail. I have written to Ofcom about that very issue, and I realise that it is monitoring the situation. Royal Mail delivers a significant amount of mail at the moment. However, TNT Post UK is able to cherry-pick and operates only in urban areas. They can use the post office and have access to the services of Royal Mail to deliver on their behalf. Where TNT Post UK or any other postal operator is asking Royal Mail to deliver a greater portion of letters to more expensive-to-serve areas such as, for example, rural areas, Royal Mail has the regulatory flexibility to charge a fair price and make a fair return based on the cost of delivering those letters. That practice is known as zonal pricing and allows Royal Mail to charge more for delivering access mail in areas where it may potentially incur higher costs. That is a good part of the rationale in our amendment.
The threat follows that particular threat. That additional cost differential and time delay in delivering cross-border mail follows the privatisation of Royal Mail and the introduction of direct competition for delivery of the post. As a result of that privatisation, the current six-days-a week, one-price-goes-anywhere universal postal service across the UK and the North is at severe risk of becoming unsustainable. Royal Mail continues to be required by law to deliver to all postcodes six days a week at a uniform price, but other postal operators are free to cherry-pick the more profitable densely populated urban areas for mail deliveries, which is a point that I touched on earlier.

As a result of its legal obligation as the sole universal service provider, Royal Mail is now unfairly at a competitive disadvantage to other postal operators. The volume of letters being delivered has been in decline for some time and is expected to drop even further. Only by using the profits from the easier-to-serve urban areas can a UK- and North-wide network be maintained. The current model undermines the sustainability of those universal services.
In our rural constituencies, the universal postal service is at greater risk than elsewhere. The rural post offices and rural postpeople who serve those communities will be the first to bear the brunt in the pursuit of a viable, or what is referred to as viable, postal service.

Ofcom has stated that it will conduct a review of the impact of direct delivery competition by the end of 2015 if certain conditions are met. Not only have those thresholds already been passed, but it may be too late by the end of 2015. Securing a viable future for the universal postal service will require the implementation of regulatory changes. The Minister or Ministers should be urging Ofcom to act now and to conduct an immediate review of the impact of direct delivery competition on the universal service in preparation for those changes. '

We should also use this opportunity to expand the universal service charge to incorporate a value-for-money, cross-border service through regulatory changes North and South. Only by working in conjunction with her — I presume that the Minister responsible for that is a "her" — North/South Ministerial Council colleagues and her counterparts in the Westminster Government will the Minister of Enterprise, Trade and Investment be able to properly assist businesses on this island. The way to do that is to ensure the long-term viability of a universal postal service that incorporates a value-for-money, cross-border service.


Photo of Gordon Dunne
Gordon Dunne (DUP)
I also welcome the opportunity to speak on the motion. As the motion states, we fully recognise:

"the importance of a reliable, affordable and effective postal delivery service"

for all customers and business users. Our constituents quite rightly deserve a cost-effective and efficient postal delivery service, and it is vital for our businesses in these tough economic conditions that competitive postal services are available to all users to meet their postal needs.
Despite the digital revolution, we are still reliant on our postal service, and the post remains a very important form of communication for many customers. Indeed, with the ever-increasing use of online retail, the issue of postal charges is timely. We must also recognise the importance of cross-border business between Northern Ireland and the Republic. One of our main export bases is the Republic, so it is important that we ensure that we maximise every opportunity for further business growth and development.

The 2010 Consumer Focus Post report stated that over two thirds — 68% — of businesses here post to the Republic regularly, with a further 45% of those stating that the cross-border post is:

"an essential service for their business".

There is no doubt that Royal Mail is highly regarded in Northern Ireland by both domestic users and local businesses; the statistics back that up. Consider the Ofcom report of 2014, which stated that nine out of 10 people in Northern Ireland — 89% — are satisfied with Royal Mail, compared with 86% across the UK. During the Ofcom consultation, responses were sought regarding satisfaction with specific aspects of Royal Mail's service across six categories, and the Northern Ireland figures were above the UK average in every category. It is worth pointing out that, unlike Royal Mail, An Post does not deliver on Saturdays, so there is room for improvement across the sector and not just by Royal Mail.

We have seen an increase in competition from alternative courier and delivery services in recent years. That competition is very welcome in the business community; it is healthy and should be further encouraged. People accuse Royal Mail of taking 2·14 working days to deliver a letter from Belfast to Dublin, yet there is next-day delivery from Belfast to London. We need to remember that next-day delivery is not just dependent on distance and that two factors come into play. When a letter leaves the UK and goes into the Republic, it ceases to be under the jurisdiction of Royal Mail and transfers to An Post.

Sammy Douglas (DUP)
Will the Member give way?

Gordon Dunne (DUP)
Will do.

Sammy Douglas (DUP)
The motion calls on the Minister of Enterprise, Trade and Investment to raise the matter at a forthcoming meeting of the North/South Ministerial Council when it meets in trade and business sectoral format. Does the Member agree that postal services are a reserved matter for the Department for Business, Innovation and Skills at Westminster?


Roy Beggs (UUP)
The Member has an extra minute.

Gordon Dunne (DUP)
Thank you, Mr Deputy Speaker. It is my clear understanding that it is a reserved matter and is not the responsibility of the Northern Ireland Assembly.

Phil Flanagan (Sinn Féin)
I thank the Member for North Down for giving way. I appreciate that this is not a transferred matter and that it is a matter for the Westminster Government. However, given that it was previously discussed at an NSMC meeting, does the Member not accept that there is a precedent for the North/South institutions to take an active interest in the subject?

Gordon Dunne (DUP)
It may be the subject of further discussion at such a meeting.

As two organisations are involved, that leads to added time. However, there is room for improvement, and there should be greater collaboration between the two companies to streamline the process, to form a more strategic alliance and, ultimately, to deliver a better service for all users. It is worth reminding the House of the greater economic benefits that local businesses have as a result of being within the United Kingdom. Royal Mail provides a six-day service at a uniform price across the UK, which greatly assists many people here and is something that I am sure all Members of the House will fully agree with. Under regulations, Royal Mail must provide at least one standard international postal service at a uniform tariff within the UK. That means that, whether a letter is posted from Larne to Limerick or Cornwall to Cork, it has to be charged at the same uniform price.

The 2014 Ofcom report stated that almost half — 47% — of adults in Northern Ireland perceived the pricing structure to the Republic as offering poor value for money. Therefore, there is certainly room for improvement. In the best interests of local businesses and residents, we need to do all that we can —

Roy Beggs (UUP)
Will the Member bring his remarks to a close?

Gordon Dunne (DUP)
— to ensure delivery for the people of Northern Ireland and to encourage greater economic development for all of us here.


Tom Elliott (UUP)

I was going to say that I welcomed the opportunity to take part in the debate, but I am somewhat reluctant to do so, given the ongoing serious issues in the Assembly and the Executive. I and possibly others feel that we could be debating more important issues as opposed to debating a reserved matter. However, I am willing to take part in the discussion.

The proposer of the motion indicated — I am paraphrasing him as I cannot remember his exact words — that people were determined to use the border to exploit others, but surely that has gone on for decades. We have heard of the smugglers of many years ago, and we have heard about the murders that went on for 30 years. People exploited the border in those times. People still exploit the border with fuel smuggling and fuel laundering. I hope that the Member is not putting those issues into the same category as the price of a postage stamp, because those other matters are much more serious.
I have to say, though, that, in today's society, many of the means by which people communicate with each other have become electronic. Whether by computer, email, tablet or iPhone, much more business and communication are carried out by that method, as opposed to by letter. However, it is still very important to have that sector in place. I always say that you cannot email a parcel to your friend; sending it by post is the only way. So, clearly, it is still a very important factor and one that we need to preserve. I am not so sure how you deal with the cross-border pricing difference, because I do not think that you can have a single pricing structure for the island of Ireland. No matter how you relate it, we in Northern Ireland are still part of the United Kingdom and will remain so.

It is interesting to note the changes in the cost of postage over the last three years in Northern Ireland. The cost of a second-class stamp has risen by 47% over the three-year period. I think that, by anybody's calculation, that is huge and significant, especially for those who use the service quite a lot. I read that businesses normally use second-class post as opposed to first class, so that is a 47% increase in the cost of that aspect of their business. I think it important that we put it into that context.

To me, a more vital element of the debate is the protection of rural services through post offices. That is really important to rural communities and, indeed, to those in urban areas. I would not want to exclude them, because the post office, to be fair, is a central and focal point in many communities, whether urban or rural. Post offices provide a significant service that I do not want to be lost, especially for the most vulnerable. Those people need to be protected, and the post office is one of the services that, I think, is important in helping them to live a normal life in our community. No matter what people say about the person who delivers the post, he or she performs an important service to the community. That person does not just deliver the post; he or she makes sure that individuals are OK. How many people have been found, maybe unconscious or with an illness, by the local postman or postwoman? I think it right that we try to protect those services. The initial proposal in the debate focused much too much on the cost of cross-border postage. To be fair to the proposer, he said that it was not just about the cost but about people and communities. I would have liked a much greater focus on communities than on the cost of a stamp.

Trevor Lunn (Alliance)

My party supports the amendment, and, if that does not pass, will happily support the motion. They are both very worthy, and, even if what is being demanded may be very difficult to achieve, it is still well worthwhile having a go. I understand the irritation of MLAs and constituents who live along the border and cannot see the justification for having to pay the same price to post a letter to somewhere only a couple of miles away as it costs to post a letter to the Orkneys. However, that is, unfortunately, the way it is at the moment.

I will deal with the motion first. Rightly, it expresses concern about the current system. A letter going from North to South requires a European stamp costing 97p, which contrasts with a cost of 68 cents, currently about 55p, for the same letter going from the South to the North. I wonder why there is such a price differential for the same service, even though there is a border. It is an amazing difference. I am told that, in Germany, for instance, sending a letter anywhere in the EU is the same price. It is the same price to any one of 27 countries. If you exclude the Scandinavian countries, the UK has the most expensive postage in Europe. The comparison gets even starker when a letter is A4 in size: the price for sending that from North to South rises to £3·20, compared with €1·20, about £1, for one South to North. It is not helped by An Post's poor record of delivery times, but I noted that Mr Flanagan pointed out that those letters have to go from here to GB first and then on to the Republic, so I imagine that it is not entirely the An Post's fault. However, one does wonder in passing whether the system in the Republic is underfunded. An Post could certainly make a case for extra investment to modernise the operation and provide a more efficient service, but that, of course, is a matter for it and not for us.

The motion calls for the Minister to raise the matter at an NSMC meeting. I have written in my notes that I look forward to hearing her comments at the end of the debate, but it does not look as though there will be any. I imagine that, as it is a reserved matter, she does not have to respond, but I note that there has been previous discussion of the matter at NSMC meetings.

The issue is complex. Royal Mail has been privatised and is free to set its prices, subject only to certain caps on second-class services and a commitment to universal service to any part of the UK. It is hard to see how such a pricing gap as currently exists can be bridged, but, by all means, let us ask the question and keep at the topic. I imagine that the NSMC is a good starting point for somewhere to raise it.

To return to the amendment, the viability of our rural post offices is a major issue. It did not particularly need to be connected to the motion, because it goes well beyond just postal services. As Mr Elliott rightly said, our rural post offices are community hubs. They are a point of contact, particularly for older people, and we should do what we can to protect them. However, I am not sure whether direct-delivery competition is the biggest threat to their existence. Others have pointed out that electronic mail, social media and the Internet's speedy services have hit the Post Office and will probably continue to do so.

At the moment, there is nothing specifically to hinder private operators offering a cross-border service for letters as well as parcels. In a normal way, I would encourage competition as a means — indeed, the only effective means — of reducing prices, but the final part of the amendment calls on the Minister to work through the NSMC and Westminster to:
"ensure the long-term viability of a universal postal service that incorporates a value-for-money cross-border service."
For now, I think that the best thing that we can do is to keep the pressure on and hope that we can come up with something that is satisfactory for everybody. I cannot quite see how we can do that at present, but that is not to say that we should not try.

The debate stood suspended.
(Mr Principal Deputy Speaker [Mr Mitchel McLaughlin] in the Chair)