Postal Services Bill

My Lords, everyone in the House would entirely endorse the remarks made by the two noble Lords who have brought forward amendments in relation to the importance to our national life of the post office network. That is a given on all Benches and I suspect that no Member of your Lordships’ House would disagree. I have two propositions, which I hope your Lordships’ will accept, which are totally germane to why the two amendments should be rejected. First, from a commercial point of view, it is virtually inconceivable that any operator of the Royal Mail with a universal delivery obligation to deliver mail six days a week would not wish to avail themselves of the services of the Post Office. There is no other network in the United Kingdom that would enable that obligation to be fulfilled. There is, therefore, an essential logic as to why any owner of the Royal Mail would wish to continue to use the post office network. Secondly, the noble Lords who have brought forward these amendments have to take on board that, were their amendments to be carried and the requirement placed in the Bill, there is a significant concern that the European state aid rules would come into play. The whole transaction could be held up for a year or two while the European state aid issue was resolved, during which time the Royal Mail would get into further financial difficulties. In my view, it is inevitable that any operator of the Royal Mail is bound to use the Post Office to deliver the universal service obligation. At the same time, I would not wish to risk the hold-up of this transaction, thereby jeopardising the future of Royal Mail, because of the operation of the state aid rules.