Postal Services Bill

My Lords, I apologise to the House for missing my cue at the beginning of this group but I should like to speak briefly to my Amendment 14, which is in this group. It seeks to ensure that service-user groups are consulted before Royal Mail is sold off and would require the Secretary of State to bring a report to Parliament setting out how the universal service provider will maintain the minimum requirements contained in the universal postal service obligation. Before I do that, I want to say a word about the debate we had on this issue on the second day in Committee on 14 March. In that debate, the noble Lord, Lord Razzall—I am not sure whether he is in his place today—whom the Minister described as having all the subtlety of an air raid, said: "““If we are to preserve the reputation of this House for knowing the facts and having expertise, we really must not say things that are not true … I said earlier, it is more expensive for the Royal Mail to deliver to Norwood Green or Hampstead than to maintain the service to the Orkneys and Shetland … if we are to be the serious House that knows the facts, we should take that on board””.—[Official Report, 14/3/11; cols. 113-14.]" Having a concern for the truth which is at least as great as that of the noble Lord, Lord Razzall, I undertook to follow up the matter and come back to it on Report, if it was necessary to set the record straight. The Minister helpfully sent us a note on the subject and I have also taken the matter up with the Royal Mail. From this it appears that the cost of delivering the universal service in urban areas other than London is approximately 11 per cent lower per postal item than the average cost across the country as a whole. The cost of delivering the universal service in rural areas is approximately 11 per cent higher per postal item than the average cost across the country as a whole. However, the cost of delivering the universal service in London is an anomaly at approximately 10 per cent higher per postal item than the average cost across the country as a whole, largely due to higher wage rates in London. From this it is apparent that the cost of delivering to London and rural areas is roughly the same and far higher than the cost of delivering to other urban and suburban areas. Royal Mail comments that, other than in London, delivery of an item to an urban area is on average 22 per cent less costly than delivery to a rural area. I reiterate that the claim of the noble Lord, Lord Razzall, that it is more expensive to deliver to Hampstead and Norwood Green than to Shetland and the Orkneys is not quite correct. I have actually toned down what Royal Mail said. As Shetland and the Orkneys are more remote than the average rural area, delivery costs substantially more per item than it does in London—more than double. It is not clear where the noble Lord was getting his figures from. He was probably comparing wage rates that are higher in London; and he was probably not comparing like with like. Myriad other costs are involved in delivering to places such as Shetland and the Orkneys. I hope that that is now clear and that we can put that matter behind us. Amendment 14 would oblige the Secretary of State to consult service-user groups before Royal Mail was sold off, and would require him to lay a report before Parliament setting out how the universal service provider will maintain the minimum requirements in the universal postal service obligation. Among user groups that it would be appropriate to consult, the amendment instances small businesses, pensioners, people with disabilities and people in rural and remote areas. However, as was said in the debate on Amendment 24N in Committee, I am sure that the list is not exhaustive. Amendment 14 is a re-run of Amendment 16, debated in Committee on 14 March. On that occasion, I described in detail why it was important to consult all those groups and I do not propose to do that again. However, when withdrawing my amendment in Committee, I said: "““The Delegated Powers and Regulatory Reform Committee has pointed out that the Secretary of State has a power””—" under Clause 33(5)— "““to alter the minimum requirements of the universal postal service. Without following the conclusions of the Ofcom review, this is, as the committee pointed out, a significant power for the Secretary of State to have. It would not be unreasonable for the Secretary of State to be obliged to consult the groups that we have mentioned in the amendment before having the opportunity to exercise that power””.—[Official Report, 14/3/11; col. 122.]" I said that I would read the record carefully and I have noted the words of the noble Baroness in her response to a similar amendment, then Amendment 24N, requiring Ofcom to consult an identical range of user interests when conducting a review of the minimum requirements contained in the universal postal service obligation. The noble Viscount, Lord Tenby, kindly moved that amendment for me in Committee on 6 April, when I was out of the country. At col. 1785, the noble Baroness said that the Bill should be read alongside Section 3 of the Communications Act 2003, which already requires Ofcom to have regard to a similar range of groups when carrying out any of its functions. Looking again at the remarks of the noble Baroness in response to concerns voiced in Committee by the noble Baroness, Lady Kramer, on 14 March at cols. 119-120, I detected an assurance that when performing its duties under the Bill, Ofcom’s general duties in the Communications Act 2003 would apply. If she can confirm this, and that Ofcom will have to report annually to the Secretary of State on its activities, including those in relation to provision of the universal service, and that the Secretary of State is required to lay that report before each House of Parliament, it may be possible not to move my amendment.