Postal Services Bill

My Lords, Amendment 60 would place a new duty on Ofcom to have regard to the need to avoid regulation where market forces and effective competition allow. I understand the rationale behind this amendment. Indeed, the Government firmly believe that the regulatory regime going forward needs to be as light touch as possible. This was made clear by the Secretary of State for Business, Innovation and Skills who, in a recent letter on the subject to the chairs of Ofcom and Postcomm, stated: "““Given the seriousness of the problems facing Royal Mail, I believe that a comprehensive reassessment of the regulatory regime is required in the light of developments in the postal and communications sectors to … look again at where regulation is needed””," and, "““determine what form that regulation should take if required””." While sharing the view that regulation must be as light touch as possible, we believe that a duty such as the one imposed by Amendment 60 goes too far and could have some very undesirable consequences. These undesirable consequences could come about because there may be real reasons why it might not always be possible for the universal service provider to be allowed to respond to market dynamics, as my noble friend Lord Eccles has said. For example, there is the requirement to provide the universal service at an affordable and uniform price. However competitive the market may be, it is by no means certain that market dynamics would force the universal service provider to meet those requirements. As such, Ofcom may need to regulate to some degree to ensure that these requirements are met even if there were a fully competitive market across the full range of postal services. Finally, I would like to remind your Lordships that Ofcom is already under a duty to keep regulatory burdens to a minimum under Section 6 of the Communications Act 2003. I hope that this will reassure the noble Lord, Lord Young, and that he will feel able to withdraw this amendment at the appropriate time and to support the government amendment in this group. I beg to move.