Postal Services Bill

The point at issue in Amendment 66A is whether Royal Mail should be allowed to be hived off and broken up into pieces. We are proud of the fact that there are 115,000 post boxes around the country. Royal Mail has increasingly modern mail centres and the famous fleet of 30,000 red vehicles. The Royal Mail Group’s letters and packages business covers the whole of the UK with a one-price-goes-anywhere universal service, six days a week. That is something that Royal Mail is proud of, and something that we, as customers, want. It works only because it is part of an integrated system. Amendment 66A would ensure that we cannot have a situation where everything is shattered into smithereens, people pick up the bits that they want, cherry picking, and the bit that needs most help and support—the bit that is most threatened—is left. The consequence of such a situation may be to undermine our universal service, so we seek support for Amendment 66A. I shall comment, if I may, on government Amendment 69. Clause 42 provides for Ofcom to review the extent to which the universal service provider is bearing a financial burden by providing the universal postal service. Clause 43 provides for the regulator to consider mechanisms to provide for a burden-sharing arrangement, if Ofcom finds that such a burden exists. This is both a necessary and welcome mechanism in the Bill. Government Amendment 69 would prevent Ofcom from making such a review for a period of five years rather than three years, as originally proposed. This could be seen as a concession to those who want to resist a levy to share the burden of the universal service. We are a bit concerned about that and would like to hear the Government’s reasons. However, we can see the argument for a five-year transitional period in this case, as we have sought for the USO minimum requirements under Clause 35. Government Amendment 70 is exactly in line with the provisions that have been sought by the Opposition. It is welcomed by both management and staff in Royal Mail. With the potential turmoil and uncertainty of privatisation, it is important to provide some guarantee that Royal Mail will be able to make long-term investment decisions in the provision of the universal service. If it could lose all or part of the universal service, that would surely be a deterrent to major investment in the network that guarantees that the universal service is provided. By guaranteeing the universal service provision to Royal Mail for a 10-year period, this amendment gives Royal Mail the confidence to make necessary future investment. We are delighted that the Government have listened to the submission on this question from this side of the House, and from those inside the sector who have argued for such an amendment. Amendment 70A goes on to seek that a reasonable period of notice be given before any other operator can begin providing postal services required under a universal service obligation. Under Clause 43, Ofcom can make a procurement determination—in other words, allow some or all of the universal service to be provided by a company other than Royal Mail. Royal Mail and the postal sector desperately need stability. Royal Mail is undertaking a major programme of modernisation involving more than £2 billion of investment. This process, combined with an aggressive regulatory regime, means that the company is facing a very restricted financial position. The business must be given sufficient notice of such a drastic change if it is to be able to plan effectively and to continue to provide the services expected of it. We are pleased that the Government have listened to representations and agreed that there should be no procurement determination for at least 10 years. However, if such a drastic move were to be made to remove Royal Mail as universal service provider, Amendment 70A would simply ensure that a reasonable period of notice would be required to allow everyone to make the transition. We hope to hear an assurance to this effect.