Postal Services Bill

My Lords, I can confirm that the very purpose of the Bill is to protect the universal service. I should like to put the mind of the noble Lord, Lord Young, at rest on that before I go any further. I hope, too, that I can satisfy my noble friend Lady Kramer in my response. I know that the noble Lord, Lord Low, has spoken to the Minister in another place, Edward Davey. I hope I can reassure the noble Lord on the points he was most worried about. The Bill requires Ofcom to secure the provision of the universal service and to ensure that it meets the reasonable needs of users. That latter point is a requirement not just of the Bill but of the European postal services directive. On Amendment 64, Clause 32(2)(b) retains the ability for the regulator to make exceptions where the minimum requirements for delivery and collection in Clause 30 need not apply. These are for exceptional circumstances or geographical conditions. Amendment 64 seeks to change the wording to ““highly exceptional””. The wording of the clause directly replicates Section 4(1)(a) of the Postal Services Act 2000. It also exactly replicates a provision from the Opposition’s 2009 Bill. It flows from Article 3(3) of the European directive, which states that member states must take steps to ensure the universal service, "““save in circumstances or geographical conditions deemed exceptional””." The kind of situation that constitutes an exception would be an address on a remote island, where there is a single ferry service a week. It would be unreasonable to expect Royal Mail to deliver every day to such an address, as it would require it to charter its own boat. Another example would be where dangerous dogs at an address pose a genuine threat to postmen or postwomen. Currently this allows Postcomm to permit Royal Mail not to make daily deliveries to some addresses in extreme circumstances. Present exceptions apply to only 0.01 per cent of the approximately 28 million United Kingdom addresses. We agree with the intention behind this amendment—that the number of exceptions must be kept a minimum. However, I must confess to your Lordships that I am not sure precisely what effect saying ““highly exceptional””, as opposed to ““exceptional””, would have. It would appear to raise the bar, although to what height is unclear. We must recognise that raising the bar is likely to have two effects. First, it will probably result in more risks for hard-working postmen and postwomen, who will be asked to go to a large number of unsafe addresses. Secondly, it will probably put a greater burden on the universal service provider. I have to say to your Lordships that on both counts I am uneasy. The question I ask your Lordships is whether the current situation is unacceptable. My view is that there is no evidence of a need to move away from what we now have. Indeed, that was the view of the Opposition two years ago. Unless noble Lords opposite can provide us with a rationale for this change, the Government cannot support it. I therefore ask them to consider withdrawing this amendment. Amendment 65, in the names of the noble Lords, Lord Young, Lord Stevenson and Lord Tunnicliffe, seeks to prevent a review of the minimum requirements for a period of five years from when this part of the Bill comes into force. Similarly, Amendment 65A, in the name of the noble Lord, Lord Low, seeks to prevent the Secretary of State reducing the minimum requirements—again for a period of five years from when this part of the Bill comes into force. The whole issue of the minimum requirements is something we considered during our deliberations in Committee, and I am sorry that noble Lords were not convinced by my contribution to that debate. As I have said, the power in Clause 33 enhances the safeguards against changes to the universal service minimum requirements. Clause 30 enshrines the current minimum requirements for the universal service, with the important addition of free services for the blind or partially sighted. These requirements gold-plate our European obligations, but it is gold-plating of which we are rightly proud. As I said during Committee, and as my colleague the Minister for Postal Affairs has said in the other place, the Government have no intention of reducing the minimum requirements of the universal service during this Parliament. As things stand now, and as they would have stood under the 2009 Bill, a future Government could reduce those minimum requirements to the level required by the European directive through a negative resolution procedure using powers under the European Communities Act 1972. This means that, until this legislation is passed, Saturday deliveries could be dropped, and different prices could be charged for sending letters to different parts of the country. We do not believe that that is acceptable, and that is why we have introduced Clause 33. Clause 33 puts in place a clear procedure to be followed before the minimum requirements could be altered. Through this procedure, it offers vital new protections for us all. The protections are threefold, and I think it is important that I set this out again for your Lordships. First, there can be no changes to the minimum requirements unless Ofcom has conducted a review of the needs of users, which would, of course, inform any subsequent Secretary of State’s decision. Secondly, the clause guarantees that no change can result in a different minimum level of service to different parts of the country, so we could never have a five-day-a-week letter delivery requirement in Cornwall, but a six-day-a-week requirement in Birmingham, and services must always be priced uniformly. Thirdly, any proposal for change would be subject to the affirmative procedure in both Houses. Given these enhanced protections, I am afraid that I do not believe it would be helpful to tie the hands of the regulator or the Secretary of State in the way proposed by these amendments, as mentioned by my noble friend Lord Eccles. Ofcom will be responsible for regulating the postal services market and should be able to review the market and user needs where it feels it is appropriate. Let us not forget that Ofcom’s primary duty will be to secure the universal service. It will need to be able to gather information on customer and market needs if it is to fulfil this obligation. That would include vital information about the needs of vulnerable consumers. This is an important point as one of the general duties of Ofcom under Section 3 of the Communications Act 2003 is a requirement to have regard to the needs of persons with disabilities, the elderly and those on low incomes. Furthermore, it has been made absolutely clear by both myself and the Minister for Postal Affairs that the Government have no intention of reducing the minimum requirements of the universal service. Even if a future Government believed that changes should be made, the Bill guarantees that no change can result in a different minimum level of service to different parts of the country, and guarantees that services must always be priced uniformly. Critically, any proposal to change the minimum requirements would have to come before this House and the other place and be subject to the affirmative procedure in both Houses. It has been put to me that the first thing an investor in Royal Mail would do is lobby the Government, Ofcom and Parliament to reduce the minimum requirements of the universal service. Let me be clear to this House: any investor in Royal Mail will know our position on the minimum requirements. They will be fully aware of the strong protections that we have built around them, and they will therefore invest in the full knowledge of these protections. Of course, we cannot stop them lobbying, but I can reassure this House that they will not find it straightforward. Finally, while I hope I have made clear that this Government have no intention of changing the minimum requirements, I am happy to put on the record again, as the noble Lord, Lord Low, has requested, that that assurance applies for the rest of this Parliament, which is almost four years. However, I should also point out that the European Union directive requires that the universal service must respond to the needs of its users. A five-year legislative ban on any changes could therefore amount to non-compliance with our European Union obligations. Given the reassurances I have made on the protections for the minimum requirements, I would hope that the noble Lords, Lord Young and Lord Low, will feel able not to press their amendments.