Postal Services Bill

My Lords, I am grateful to the noble Baroness, Lady Dean, for tabling Amendment 67, as it concerns a vital issue. I also hope that she found my letter on the matter following Committee useful even if she was not entirely satisfied by it. I am grateful to her for finding time to meet me to discuss the matter, which the Government take extremely seriously. Amendment 67 proposes to give Ofcom the power to limit the indebtedness of the universal service provider in relation to the overall value of the company. The noble Baroness speaks from great experience on this issue and the noble Lord, Lord Young, expanded on her experience, which we value greatly. She made it clear how important it is that Ofcom has the power to monitor the finances of the universal service provider and to act where the situation demands. I very much acknowledge that point. I reassure her and your Lordships generally that Ofcom is well equipped to tackle the risk of unsustainable levels of debt within the universal service provider. As I said in Committee, Ofcom already has the power to impose designated USP conditions through Clause 35 that could include conditions akin to the condition 16 requirement in the Royal Mail’s existing licence. That condition does not allow the Royal Mail to do anything that, "““creates any significant risk that the necessary resources will not be available to””," carry on its business. As the noble Baroness, Lady Dean, has mentioned, Ofcom also has powers under Clauses 38 and 53 to require information from the universal service provider and to set accounting conditions to ensure it can accurately monitor the costs of the universal postal service. I appreciate that the noble Baroness, Lady Dean, is concerned at the conditionality implied by my use of ““could include””, in the context of a condition 16 requirement in the Royal Mail’s licence. There is no reason I can think of why the condition 16 requirement will not be so included. However, it will not be a matter for the Government. It will be a matter for Ofcom. I hope that the noble Baroness will find considerable comfort when I say that Ofcom’s primary duty for the post is to secure the provision of the universal service. If Ofcom considered that it was essential to use any or all of the powers that I have mentioned in order to deliver that objective, it would, as my noble friend Lord Eccles has said, be legally obliged to do so. I hope and believe that this is what the noble Baroness seeks to achieve through her amendment. With these assurances, I hope that she will feel able to withdraw Amendment 67.